Background on Nissan and its Current Situation
Nissan, the third-largest Japanese automaker, is contemplating raising over 7,000 million USD (approximately 1 trillion yen) through the sale of debt and assets, including a syndicated loan backed by the UK government, according to a report from Bloomberg News on Wednesday.
Nissan’s Financial Plan
The company plans to issue up to 630 billion yen in convertible bonds and high-yield bonds denominated in US dollars and euros, as reported by Bloomberg News citing documents it accessed.
Additionally, Nissan is considering subscribing to a 1 billion pound (approximately 1.35 billion USD) syndicated loan guaranteed by UK Export Finance, a government agency that provides loans and insurance to British exporters.
Furthermore, Nissan is exploring the possibility of selling parts of its stakes in French automaker Renault, its long-time partner in the Renault-Nissan-Mitsubishi alliance, and AESC Group, a battery manufacturer. The company is also considering selling its plants in South Africa and Mexico.
Nissan’s Recent Cost-Cutting Measures
Earlier this month, Nissan unveiled an extensive cost-cutting plan aiming to reduce its workforce by around 15% and decrease the number of car factories worldwide from 17 to 10.
Sources told Reuters that Nissan is examining the possibility of closing two car assembly plants in Japan and other facilities abroad, including its Mexican plant, as well as halting production in South Africa under the cost-reduction plan.
Key Questions and Answers
- What is Nissan considering? Raising over 7,000 million USD through the sale of debt and assets, including a UK government-backed loan.
- What types of debt will Nissan issue? Up to 630 billion yen in convertible bonds and high-yield bonds denominated in US dollars and euros.
- What is UK Export Finance? A government agency that provides loans and insurance to British exporters.
- What assets might Nissan sell? Parts of its stakes in Renault, AESC Group, and its plants in South Africa and Mexico.
- What recent cost-cutting measures has Nissan announced? Reducing its workforce by approximately 15% and decreasing the number of car factories from 17 to 10.
- Which plants might Nissan close? Two car assembly plants in Japan and other facilities abroad, including the Mexican plant, as well as halting production in South Africa.
