TOKYO (Reuters) – Nissan Motor Co (7201.T) has raised $7.8 billion in financing from its creditors since April as it tries to shore up its cash position in the face of falling sales due to the coronavirus pandemic, its latest annual securities report shows.
In a filing to Japanese financial authorities on Monday, the automaker said it had raised a total of 832.6 billion yen ($7.8 billion), including 712.6 billion yen announced in late May to respond to the novel virus.
Japan’s No. 2 automaker is struggling to recover profitability after posting its first annual loss in 11 years, suffering from falling sales, a tarnished image and a deteriorating cash position even before the virus outbreak sapped global demand for cars.
Under new Chief Executive Makoto Uchida, Nissan has pledged to cut 300 billion yen from its fixed costs over the next four years, by slashing its production capacity and vehicle model range by around one fifth.
Unveiling its recovery plan in late May, Uchida said improving cash flow would be Nissan’s biggest challenge, though the company expected to have positive free cash flow in the second half of the current financial year, compared with a negative 641 billion yen in the year to March.
In addition to the secured funding, Nissan has said it has 1.1 trillion in net cash in its automotive business, and credit lines of up to 1.3 trillion yen.
But the company has acknowledged that more funding might be needed to cushion the blow of the coronavirus if it continues to weigh on sales in the coming months.
Nissan posted a 40% year-on-year fall in global vehicle sales during the March-May period, when global automakers shuttered most of their vehicle plants and car dealerships were closed to stem the spread of the virus.
($1 = 107.2900 yen)
Reporting by Naomi Tajitsu; Editing by Himani Sarkar and Stephen Coates