Nissan plans $8.9 billion funding with backing from UK government as it faces record debt
The struggling Japanese automaker is facing around US$5.6 billion of debt due next year, the most in Bloomberg-compiled data going back to 1996. PHOTO: REUTERS
TOKYO - Nissan Motor, facing a huge loan repayment wall in 2026, is seeking to raise more than 1 trillion yen (S$8.9 billion) from debt and asset sales to keep operations on track, according to documents seen by Bloomberg News.
The struggling Japanese automaker plans to issue as much as 630 billion yen in convertible securities and bonds, including high-yielding US dollar and euro notes, the documents show. Nissan also plans to take out a £1 billion (S$1.7 billion) syndicated loan, guaranteed by UK Export Finance.
In addition, Nissan is seeking to sell part of the stakes it owns in Renault and battery maker AESC Group, as well as plants in South Africa and Mexico. Sale-and-lease-back plans for its Yokohama headquarters, plus properties it owns in the United States, are also on the cards.
The aggressive and wide-ranging fundraising plans underscore Nissan's rapidly deteriorating financial and operational position, despite efforts by newly appointed chief executive officer Ivan Espinosa to turn the company around. Mr Espinosa presented the options to the board earlier in May, people familiar with the matter said, with the goal of securing some funding within the quarter that will end June 30.
The funding proposal doesn't appear to have been approved by Nissan's board yet, leaving it unclear whether it will happen, the people said.
The funding urgency stems from internal forecasts predicting that Nissan's car manufacturing operations will see excess cash dwindle to close to zero by the end of March 2026, the documents show. The projections are based on US tariffs remaining in place and no further cash injections.
Nissan has sufficient capital of about 2.2 trillion yen in cash on hand and credit to last the next 12 to 18 months, Mr Espinosa told Bloomberg TV earlier this month. 'We have a solid footing in terms of liquidity,' he said.
Given the uncertainty over tariffs and the state of its business, Nissan didn't issue a profit outlook for the current fiscal year, saying only it expects to post sales of 12.5 trillion yen. Along with its group firms, Nissan is facing around US$5.6 billion of debt due next year, the most in Bloomberg-compiled data going back to 1996.
The internal documents viewed by Bloomberg also show that Nissan expects to see an operating loss of as much as 450 billion yen for the 12 months through March 2026 if higher tariffs remain in place. Without tariffs, the loss is forecast to be 300 billion yen. Either would mark the biggest operating deficit in the company's history.
Mr Espinosa announced plans earlier in May to eliminate 20,000 jobs and close seven of Nissan's 17 plants by March 2028 after the company reported a 671 billion yen net loss for most recent fiscal year. The measures follow the collapse of talks earlier in 2025 to join forces with Honda Motor. Those discussions ended in part due to disagreements about Nissan's willingness to make deeper cuts to production and personnel.
Various financial institutions have been lined up for the £1 billion in loans backed by UK Export Finance, which mainly supports British exporters.
Nissan operates Britain's largest automaking hub in Sunderland, and has committed to boost electric vehicle production at the facility with a £2 billion investment. The British government has hailed the project as a vote of confidence in the country's automotive industry after years of uncertainty following Brexit.
Earlier in May, AESC announced plans to push ahead with a second battery factory in Sunderland after getting financing support from UK Export Finance and the National Wealth Fund, as well as other investors. Formerly a Nissan affiliate, AESC is based in Japan and majority owned by Chinese interests. BLOOMBERG
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