{"id":825914,"date":"2025-05-28T08:56:45","date_gmt":"2025-05-28T06:56:45","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=825914"},"modified":"2025-05-28T08:56:51","modified_gmt":"2025-05-28T06:56:51","slug":"nissan-hunts-r125-billion-in-funding-with-future-in-south-africa-uncertain","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/825914\/nissan-hunts-r125-billion-in-funding-with-future-in-south-africa-uncertain\/","title":{"rendered":"Nissan hunts R125 billion in funding with future in South Africa uncertain"},"content":{"rendered":"\n

Nissan Motor Co., facing a huge loan repayment wall<\/a> next year, is seeking to raise more than \u00a51 trillion ($7 billion) from debt and asset sales to keep operations on track, according to internal documents seen by Bloomberg News.<\/p>\n\n\n\n

The struggling Japanese automaker plans to issue as much as \u00a5630 billion in convertible securities and bonds, including high-yielding US dollar and euro notes, the documents show. <\/p>\n\n\n\n

Nissan also plans to take out a \u00a31 billion ($1.4 billion) syndicated loan, guaranteed by\u00a0UK Export Finance<\/a>. Nissan operates Britain\u2019s largest automaking hub, in\u00a0Sunderland<\/a>.<\/p>\n\n\n\n

In addition, Nissan is seeking to sell part of the stakes it owns in Renault SA and battery maker AESC Group Ltd., as well as plants in South Africa and Mexico. <\/p>\n\n\n\n

Sale-and-lease-back plans for its Yokohama headquarters, plus properties it owns in the US, are also on the cards.<\/p>\n\n\n\n

The carmaker\u2019s shares in Tokyo jumped as much as 4.6%, their biggest intraday rise in more than a week.<\/p>\n\n\n\n

The aggressive and wide-ranging fundraising plans underscore Nissan\u2019s rapidly deteriorating financial and operational position, despite efforts by newly appointed Chief Executive Officer Ivan Espinosa to turn the company around. <\/p>\n\n\n\n

Espinosa presented the options to the board earlier this month, people familiar with the matter said, with the goal of securing some funding within the quarter that will end June 30.<\/p>\n\n\n\n

The funding proposal doesn\u2019t appear to have been approved by Nissan\u2019s board yet, leaving it unclear whether it will happen, the people said, declining to be identified discussing details that are private. The proposal is also slated to include the rollover of some debt.<\/p>\n\n\n\n

Representatives for Nissan didn\u2019t immediately respond to a request for comment. A spokesperson at UK Export Finance said in a statement that the organization does \u201cnot comment on speculation around specific transactions.\u201d<\/p>\n\n\n\n

The funding urgency stems from internal forecasts predicting that Nissan\u2019s car manufacturing operations will see excess cash dwindle to close to zero by the end of March 2026, the documents show. The projections are based on US tariffs remaining in place and no further cash injections. <\/p>\n\n\n\n

Nissan has sufficient capital of about \u00a52.2 trillion in cash on hand and credit to last the next 12 to 18 months, Espinosa told Bloomberg TV earlier this month. \u201cWe have a solid footing in terms of liquidity,\u201d he said.<\/p>\n\n\n\n

Given the uncertainty over tariffs and the state of its business, Nissan didn\u2019t issue a profit outlook for the current fiscal year, saying only it expects to post sales of \u00a512.5 trillion. <\/p>\n\n\n\n

Along with its group firms, Nissan is facing around $5.6 billion of\u00a0debt due next year<\/a>, the most in Bloomberg-compiled data going back to 1996.<\/p>\n\n\n\n

The internal documents viewed by Bloomberg also show that Nissan expects to see an operating loss of as much as \u00a5450 billion for the 12 months through March 2026 if higher tariffs remain in place. <\/p>\n\n\n\n

Without tariffs, the loss is forecast to be \u00a5300 billion. Either would mark the biggest operating deficit in the company\u2019s history.<\/p>\n\n\n\n

Espinosa announced plans earlier this month to\u00a0eliminate<\/a>\u00a020,000 jobs and close seven of Nissan\u2019s 17 plants by March 2028 after the company reported a \u00a5671 billion net loss for most recent fiscal year. <\/p>\n\n\n\n

The measures follow the collapse of talks earlier this year to join forces with Honda Motor Co. Those discussions ended in part due to disagreements about Nissan\u2019s willingness to make deeper cuts to production and personnel.<\/p>\n\n\n\n

Nissan will close two factories in Japan, as well as locations in four other countries as part of its restructuring and cost cutting process, the Yomiuri newspaper and other news outlets have\u00a0reported<\/a>, citing unidentified sources. <\/p>\n\n\n\n

In Japan, the targeted facilities are in Oppama and Hiratsuka, near Yokohama, and represent about 30% of domestic production.<\/p>\n\n\n\n

Various financial institutions have been lined up for the \u00a31 billion in loans backed by UK Export Finance, which mainly supports British exporters. <\/p>\n\n\n\n

It will comprise one of the largest components of Nissan\u2019s planned fundraising. In the past, the agency has helped to secure financing for\u00a0high-speed rail construction<\/a>\u00a0in Turkey and\u00a0infrastructure in Angola<\/a>.\u00a0<\/p>\n\n\n\n

In Sunderland, Nissan has committed to boost electric vehicle production with a \u00a32 billion investment<\/a>. The British government has hailed the project as a vote of confidence in the country\u2019s automotive industry after years of uncertainty following Brexit. <\/p>\n\n\n\n

Earlier this month, AESC announced plans to push ahead with a second battery factory in Sunderland after getting financing support from UK Export Finance and the National Wealth Fund<\/a>, as well as other investors. Formerly a Nissan affiliate, AESC is based in Japan and majority owned by Chinese interests. <\/p>\n\n\n\n

The recent UK-US\u00a0trade deal<\/a>\u00a0could offer some reprieve to Nissan if it\u2019s able to export cars from Sunderland, which has an annual capacity of 500,000 units, at a lower tariff\u00a0rate<\/a>. <\/p>\n\n\n\n

US President Donald Trump\u2019s 25% tax on all vehicles imported into the US, which took effect in April, has cast a shadow over most global automakers. <\/p>\n\n\n\n

It would be\u00a0costly<\/a>\u00a0for all of Japan\u2019s export-heavy carmakers, and especially\u00a0painful\u00a0<\/a>for Nissan given its precarious financial state.<\/p>\n\n\n\n

Nissan has said it has \u00a52.1 trillion in\u00a0unused credit lines<\/a>\u00a0in addition to its own liquid reserves, but cash flow turned negative in its latest fiscal year and ratings agencies have\u00a0cut<\/a>\u00a0the company\u2019s creditworthiness status to junk.<\/p>\n","protected":false},"excerpt":{"rendered":"

Nissan is seeking to raise $7 billion in funding as it considers selling parts of its business, including plants in South Africa and Mexico.<\/p>\n","protected":false},"author":59,"featured_media":802564,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[],"class_list":["post-825914","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/825914","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=825914"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/825914\/revisions"}],"predecessor-version":[{"id":825925,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/825914\/revisions\/825925"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/802564"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=825914"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=825914"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=825914"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}