The Japanese government has guaranteed most of a loan to Japanese automaker Nissan Motor from the Development Bank of Japan (DBJ), a source said, taking its guarantee to over 40% of 713 billion yen ($6.7 billion) in finance for Japan’s second-largest automaker.
The hefty government guarantee suggests financial firms are cautious with regards to help to fund the automaker as it seeks to get back to profitability and stop wasting cash.
The government has guaranteed 104 billion yen of the 180 billion in loans from the DBJ, said the source with a direct understanding of the matter who refused to be identified as the information is not public.
DBJ and Nissan have not commented on the matter.
Three other sources told Reuters in May the government would guarantee part of a loan from Mizuho Financial Group, intended at helping Nissan ride out the coronavirus crisis.
The two guarantees, if confirmed, would put the Japanese government on the hook to the tune of 304 billion yen, or 43% of the overall loans the automaker has secured from its main lenders to weather the coronavirus crisis.
The automaker has also secured 120 billion yen from Mitsubishi UFJ Financial Group and 50 billion yen from Sumitomo Mitsui Financial Group, the sources informed Reuters before. The government has not guaranteed any portion of these loans, the sources added.
Nissan had vowed to cut 300 billion yen from annual fixed costs and become a smaller, more effective company after the coronavirus crisis exacerbated a drop in profitability that culminated in its first yearly loss since fiscal 2008 in the year ended March.
