Japanese govt exposed to 40% of $6.7 billion Nissan loans: Sources1 min read . Updated: 07 Sep 2020, 12:11 PM IST
- Nissan, Japan's second largest car maker, is desperately trying to return to profitability and stop bleeding cash.
The Japanese government has guaranteed most of a loan to Nissan Motor Co from the Development Bank of Japan (DBJ), a source said, taking its guarantee to more than 40% of 713 billion yen ($6.7 billion) in finance for Japan's No.2 automaker.
The hefty government guarantee suggests financial firms are cautious about helping to fund the automaker as it seeks to return to profitability and stop bleeding cash.
The government has guaranteed 104 billion yen of the 180 billion in loans from the DBJ, said the source with direct knowledge of the matter who declined to be identified as the information is not public.
DBJ and Nissan declined to comment. The Ministry of Finance could not immediately be reached for comment.
Three other sources told Reuters in May the government would guarantee part of a loan from Mizuho Financial Group Inc , aimed at helping Nissan ride out the Covid-19 pandemic.
The two guarantees, if confirmed, would put the government on the hook to the tune of 304 billion yen, or 43% of the total loans Nissan has secured from its main lenders to weather the Covid-19 pandemic, Reuters calculations show.
Nissan has also secured 120 billion yen from Mitsubishi UFJ Financial Group and 50 billion yen from Sumitomo Mitsui Financial Group, the sources previously told Reuters. The government has not guaranteed any portion of these loans, the sources said.
Nissan had pledged to slice 300 billion yen from annual fixed costs and become a smaller, more efficient company after the pandemic exacerbated a slide in profitability that culminated in its first annual loss since fiscal 2008 in the year ended March.
This story has been published from a wire agency feed without modifications to the text.
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