Japanese automaker Nissan Motor has raised $7.8 billion in financing from its creditors since April as it attempts to shore up its cash position in the face of declining sales because of the coronavirus pandemic, its recent annual securities report shows.
In a filing to Japanese financial officials on Monday, the automaker stated it had raised a total of 832.6 billion yen ($7.8 billion), including 712.6 billion yen declared in late May to deal with the consequences of the coronavirus.
Japan’s second-biggest automaker is having a hard time recovering profitability after posting its first annual loss in 11 years, suffering from declining sales, a tarnished image, and a deteriorating cash position even before the coronavirus outbreak sapped global demand for cars.
Under new CEO Makoto Uchida, Nissan has vowed to cut 300 billion yen ($2.79 billion) from its fixed costs over the next four years, by cutting its production capacity and automobile model range by around one fifth.
Revealing its recovery plan in late May, Uchida stated improving cash flow would be the automaker’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 ($5.95 billion) in the year to March.
Together with the secured funding, Nissan has stated it has 1.1 trillion in net cash in its vehicle business, and credit lines of up to 1.3 trillion yen.
But the automaker agrees that more funding might be needed to deal with the blow of the coronavirus if it continues to weigh on sales in the next months.
Nissan published a 40% year-on-year decline in global auto sales during the March-May period when global automakers closed most of the vehicle plants and car dealerships to reduce the spread of the coronavirus.