Nissan seeks $4.6 billion credit

Nissan Motor has requested a $4.6 billion commitment line from major lenders to cushion the impact of the coronavirus pandemic while it seeks to engineer a desperately needed turnaround, people with knowledge of the matter said.

As the virus decimates car demand and disrupts production across the industry, Nissan is particularly vulnerable, still reeling from sharp drops in profits after decades of aggressive expansion as well as management chaos due to the scandal surrounding ousted leader Carlos Ghosn. Nissan is requesting the 500 billion yen in funding given the possibility the impact of the coronavirus on production and demand could continue for an extended period, one of the people said.

The amount has not been finalised, the second person said. The sources declined to be identified as they were not authorised to speak to the media.

A Nissan spokeswoman said the company had enough cash for its current business operations but the automaker was looking at various options to prepare for a possible crisis. She declined to comment further. Nissan’s new CEO Makoto Uchida has been tasked with delivering an aggressive recovery plan next month after the automaker’s board deemed an earlier plan by his predecessor to cut 10% of the company’s global work force as insufficient to ensure the company’s survival.

Financial strains have been increasing.

In February, Nissan posted its first quarterly net loss in nearly a decade, and for the year ended March operating profit is expected to plunge 85% to 49 billion yen ($450 million), according to a Refinitiv Smart Estimate.

Reuters