Nissan, Japan's third-largest carmaker, is facing its worst financial crisis in 25 years, with a forecast loss of up to £4 billion this year. To cope, the company is considering plans to raise more than £5 billion ($6.7 billion), including a loan guaranteed by the British government and measures to sell strategic assets.
Nissan plans to issue up to 630 billion yen in bonds and convertible securities, including high-yield loans in dollars and euros, according to Bloomberg. Part of the plan is a 1 billion pound syndicated loan that could be guaranteed by the British government.
Nissan may have to sell its global headquarters in Japan
The company is also considering selling and leasing back its 22-storey Yokohama headquarters for around £500m as part of its restructuring strategy. The plan also includes the possible sale of some US real estate, its stake in the Renault alliance, battery maker AESC Group, and factories in South Africa and Mexico.
Nissan’s current headquarters was once a symbol of success when it opened in 2009, with a showroom that could display more than 30 models. However, that grand image has now become a financial burden, forcing the company to consider selling assets in an urgent restructuring.
Cut 20,000 jobs and pause new car development to save money
Amid mounting debt, Nissan has cut 20,000 jobs and plans to close seven factories globally by 2027, including two in Japan, Oppama and Shonan. The moves are expected to save the company around £2.6bn.
The dire financial situation also forced the company to halt development of several new models to reduce costs. Although affected by the US-China trade war under former President Donald Trump, new CEO Ivan Espinosa admitted that the roots of the problem existed nearly a decade ago.
Strategic mistakes put Nissan in a prolonged crisis
CEO Ivan Espinosa said that since 2015, Nissan’s management had set high expectations, believing that the company could sell 8 million vehicles a year. Based on this illusion, the company invested heavily in expanding production and personnel. However, the current reality is that production is only about half of the expected number, and during this time, no appropriate corrective action has been taken.
The fundraising plan is still under review and has not yet been approved by Nissan’s board of directors. A company spokesperson declined to comment, saying only that the company “does not comment on rumors.”
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