Nissan receives record 130 billion yen loan guaranteed by Japan
The Development Bank of Japan granted a record 130 billion yen ($ 1.2 billion) to Nissan Motor Co. in May with a guarantee that the government will pay back most of it if the automaker defaults in difficulty, sources familiar with the matter said Monday. .
The guarantee is part of the 180 billion yen loan that Nissan received from the state-affiliated financial institution to deal with the impact of the novel coronavirus pandemic. Under the agreement, if the automaker defaults on the loan, the government will assume up to 80%, or about 100 billion yen, of the secured portion, using taxpayer money.
The pandemic has dealt another blow to Nissan sales – already affected by restructuring following the expansion pursued by former boss Carlos Ghosn, who was ousted amid allegations of financial misconduct.
DBJ said the loan should be extended quickly due to the potential impact of Nissan’s woes on local economies such as supplier jobs, the sources said.
Nissan reported a net loss of 671.22 billion yen in the fiscal year ended in March, the first full year of red ink in 11 years.
In March, the government launched a system to provide loans to businesses stung by the coronavirus epidemic through financial entities such as DBJ.
While DBJ made around 1.8 trillion yen in loans to large and medium-sized businesses at the end of July, the loan to Nissan is the only one with a state guarantee, the sources said.
During the financial crisis that followed the collapse of Lehman Brothers, Japan Airlines Co. took out a loan of about 67 billion yen in 2009. It defaulted on the loan the following year when the carrier went bankrupt, forcing the state to pay about 47 billion yen. .
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