Nissan explores a possible sale of 34% stake in Mitsubishi Motors

Nissan Motor is looking to sell some or all of its 34% stake in Mitsubishi Motors. Bloomberg News reported on Monday, mentioning unidentified sources, a move that would remodify a three-way alliance that includes French automaker Renault.

Nissan shares increased 5% on the news. Mitsubishi Motors increased 3%.

Nissan is having a hard time recovering from the coronavirus-induced downturn. It could sell its stake to a Mitsubishi group company including Mitsubishi Corp, which already owns a fifth of Mitsubishi Motors.

Such a deal would fundamentally modify a three-way partnership built by Carlos Ghosn, former chairman of the alliance, which plunged into confusion following his arrest in 2018 on charges of financial misconduct. Ghosn has denied all charges against himself.

Ghosn had wanted a full merger of Renault and Nissan, but that didn’t happen as the companies decided to repair the troubled alliance. The coronavirus crisis has, however, compounded problems and made recovery hard.

Nissan, which is 43% controlled by Renault, last week slashed its operating loss forecast for the year to March by 28%, helped by a recovery in demand, particularly in China. Mitsubishi Motors expects to post an operating loss of 140 billion yen for the business year.

Both companies are slashing production levels and costs in a bid to get back to profitability.