Going by Nissan Motor Co’s latest annual securities report, since April it has managed to raise $7.8 billion in financing from its creditors as it tries to shore up its cash reserves in the face of falling sales induced by the coronavirus pandemic which emerged from Wuhan, China.
On Monday, in a filing to Japan’s financial authorities, the automaker said it had raised a total of $7.8 billion (832.6 billion yen), including 712.6 billion yen announced in May in response to the virus.
Nissan Motor, Japan’s second biggest automaker is struggling to remain in the black after posting its first annual loss in 11 years.
Under its new CEO 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 almost a fifth.
In May, while unveiling its recovery plan, Uchida had said improving the company’s cash flow would be the company’s greatest challenge. Nissan Motor expects to have a 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. Furthermore, in addition to securing a funding, Nissan also said it has 1.1 trillion yen in net cash in its automotive business, and credit lines of up to 1.3 trillion yen.
Despite this, it has acknowledged that more funding may be required to cushion the blow if the coronavirus pandemic continues to weigh on its sales in the coming months.
During the March to May period, Nissan had posted a 40% year-on-year fall in global vehicle sales. This was during a backdrop when most global automakers shuttered the bulk of their vehicle plants and car dealerships, to stem the spread of the coronavirus.
($1 = 107.2900 yen)