7.7 Trillion Won in Debt Maturing Next Year
Considering Bond Issuance and Sale of Factories and Stakes
Bloomberg News reported on May 28 (local time) that Nissan Motor Co., which is currently facing management difficulties, plans to raise a total of 1 trillion yen (approximately 954 billion won) through asset sales, bond issuance, and other measures to repay its debts.
According to internal documents obtained by Bloomberg, Nissan plans to issue up to 630 billion yen in convertible bonds and corporate bonds and secure a syndicated loan of 1 billion pounds (approximately 1.8533 trillion won) with a guarantee from UK Export Finance. A syndicated loan refers to a loan jointly provided to a single borrower by multiple financial institutions.
Nissan also plans to sell part of its stake in automaker Renault, part of its stake in battery manufacturer AESC, as well as its factories in South Africa and Mexico. In addition, the company is reportedly pursuing a sale-and-leaseback plan for its headquarters in Yokohama, Japan, and for real estate it owns in the United States.
Bloomberg reported that this fundraising plan was presented to the board of directors earlier this month by new CEO Ivan Espinosa, and that some parts of the plan are targeted for execution by the end of next month. However, it remains uncertain whether the board will approve the plan.
According to the internal documents, Nissan expects its free cash flow to approach zero by the end of March next year. This estimate assumes that U.S. automotive tariffs remain in place and that no additional cash injections are made.
In an interview with Bloomberg TV earlier this month, CEO Espinosa stated that Nissan has about 2.2 trillion yen in cash and credit to sustain operations for the next 12 to 18 months, claiming that the company has a solid liquidity base.
Nissan did not announce a profit outlook for this year, citing uncertainty in global tariff negotiations and business prospects. The company only projected sales of 12.5 trillion yen. According to Bloomberg, Nissan Group’s debt maturing next year amounts to about $5.6 billion (approximately 7.7 trillion won), the highest since 1996.
As part of its restructuring plan, Nissan intends to close 7 out of its 17 global plants and cut 20,000 jobs by March 2028. These measures follow the breakdown of merger talks with Honda Motor earlier this year.
However, the recent trade agreement between the United States and the United Kingdom is expected to help alleviate Nissan’s management difficulties. This is because the Sunderland plant, which has an annual production capacity of 500,000 units, will be able to reduce tariff burdens when exporting to the United States. Currently, the U.S. imposes a 25% tariff on imported cars. Bloomberg noted, “This will be a significant burden for all Japanese automakers with a high export ratio, and it will be an even greater blow to Nissan, whose financial condition is unstable.”
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