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The Sun
2 days ago
- Automotive
- The Sun
Iconic carmaker thrown £1BILLION lifeline after axing 20k staff as fears grow over future of UK's biggest motor factory
AN ICONIC carmaker has been thrown a £1billion lifeline from the UK Government. The struggling car maker had announced plans to axe over 20,000 members of staff due to soaring production costs and disappointing sales. 2 2 Nissan is looking to raise £5.2billion to stay afloat, with UK Export Finance underwriting a £1billion loan - which will support the beleaguered company. The manufacturer is planning to cut its number of factories from 17 down to 10. This has prompted fears that the brand's Sunderland factory could be under threat. While Nissan has not confirmed the fate of its only UK factory, its CEO Ivan Espinosa has insisted that more electric cars will be produced there. It is hoped that the £1billion loan from Nissan's lenders, underwritten by The Government, will protect the site. The huge cash injection is just a fifth of the 1Trillion Yen needed by the company to survive. It will also look to issue as much as 630billion yen in convertible securities and bonds, including high-yield and euro notes. Reportedly, the firm is looking to sell-and-lease-back its Yokohama headquarters alongside several properties in the United States. The Yokohama site is valued at £500 million and was first opened in 2009. It has 22 floors and a glitzy gallery, along with thousands of workers who use the site every day. Finally, the struggling car manufacturer is eyeing a sale of its stakes in Renault and battery maker AESC Group. Mr Espinosa has commented in the past on Nissan's urgent cost-cutting mission. He said: 'In the face of challenging full-year 2024 performance and rising variable costs compounded by an uncertain environment, we must prioritise self-improvement with greater urgency and speed, aiming for profitability that relies less on volume." He added: 'As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery.' Development on some Nissan models has been paused, whilst the company tries to balance its books. Work on all 'advanced and post-FY26 product activities' has been paused, though Nissan has not confirmed which particular vehicles will face suspension. Mr Espinosa has previously issued a full statement about Nissan's financial woes. He said: "This is not something that happened in the last couple of years. "It's more of a fundamental problem that probably started back in 2015, when management thought this company could reach [annual global vehicle sales] of around eight million. "There were heavy investments both in terms of planned capacity as well as in human resources, but the reality today is we are running at around half that volume. And nobody did anything to fix that until now.'
The Sun
3 days ago
- Automotive
- The Sun
Major car brand ‘looking to raise £5BILLION' after axing 20K jobs & £4bn losses with ‘UK goverment to back loan'
A MAJOR car brand is reportedly looking to raise £5billion including a loan guaranteed by the UK government after axing 20,000 jobs. Cash-strapped Nissan, Japan's third-largest carmaker, is already facing £4billion in losses - its worst annual loss in a quarter century. 4 4 But now, the company are said to be considering raising more than 1 trillion yen - just over £5 billion - from debt and asset sales in a bid to prop up Nissan. 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, according to Bloomberg News. The move would also include a £1billion syndicated loan guaranteed by the British government, the documents show. Sale-and-lease-back plans for its Yokohama headquarters, plus properties it owns in the United States, are also reportedly on the cards. The aggressive fundraising plans underscore Nissan's rapidly deteriorating financial and operational position, despite efforts by newly appointed chief executive Ivan Espinosa to turn the company around. In addition, Nissan is reportedly 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. Bloomberg News cited sources as saying Nissan's board did not appear to have approved the funding proposal yet, leaving it unclear whether it would happen. The proposal was also slated to include the rollover of some debt, the report said. A Nissan representative said the company does not comment on speculation. It comes after Nissan said they could part ways with its global headquarters in Yokohama, Japan, to fund the company's urgent restructuring plan. After having moved to the 22-story high-rise in 2009, the car manufacturer is now facing mountains of debt and is on track to cut 20,000 jobs, shut several of its plants and slash billions in costs. With a glitzy gallery, the flashy headquarters can showcase more than thirty motors and stands in stark contrast to their previous offices. Legendary Nissan model is officially discontinued after selling for nearly 20 years as leaked car to 'take its place' The company have said that part of their plan has called for reviewing assets that can be sold in a desperate bid to pay for the restructuring. With its own headquarters in sight, thought to be worth approximately £500 million, Nissan would structure a deal so it could continue to use the site through a lease so its offices and operations remain in place. A company spokesperson said: "Nissan is considering all possibilities to recover its business performance, but there are no specifics to share at this point of time." The move is not unprecedented, however, with McLaren doing something similar with its HQ in Woking in recent years. Nissan confirmed in April that it was anticipating losses of up to £4 billion, its worst annual loss in a quarter century. Nissan is also planning to close seven factories by 2027, including two domestic sites which are thought to be the Oppama and Shonan plants, saving £2.6 billion in the process. There have also been reports of downsizing or a partial sale of its Tochigi assembly plan and test centre facility north of Tokyo which was recently equipped with manufacturing technologies to assemble electric vehicles. To underline the dire financial situation, the motor company is even halting the development of certain models to cut its expenses. While the car company has been hit hard by the effects of Donald Trump's tariff war, Nissan's new CEO, Ivan Espinosa, has admitted the company's financial trouble started a decade ago. He said: "This is not something that happened in the last couple of years. "It's more of a fundamental problem that probably started back in 2015, when management thought this company could reach [annual global vehicle sales] of around eight million. "There were heavy investments both in terms of planned capacity as well as in human resources, but the reality today is we are running at around half that volume. And nobody did anything to fix that until now.' 4 4
CNA
3 days ago
- Automotive
- CNA
Nissan plans US$7 billion funding, including loan backed by UK government: Report
TOKYO: Japan's struggling Nissan is considering raising more than 1 trillion yen (US$7 billion) from debt and asset sales, which would include a syndicated loan guaranteed by the British government, Bloomberg News said on Wednesday (May 28). The country's third-biggest automaker plans to issue as much as 630 billion yen worth of convertible securities and bonds, including high-yielding US dollar and euro notes, Bloomberg News said, citing documents it had seen. Nissan is also considering taking out a 1 billion pound (US$1.35 billion) syndicated loan guaranteed by UK Export Finance, the report said. UK Export Finance is a government agency that provides loans and insurance to British exporters. The Bloomberg News report said Nissan is also looking at selling part of the stakes it holds in French automaker and long-standing alliance partner Renault and in battery maker AESC Group, as well as plants in South Africa and Mexico. A representative for Nissan said the company does not comment on speculation. UK Export Finance also said it did not comment on speculation around specific transactions. Bloomberg News cited sources as saying Nissan's board did not appear to have approved the funding proposal yet, leaving it unclear whether it would happen. The proposal was also slated to include the rollover of some debt, the report said. Earlier this month, the company presented a sweeping cost-cutting plan under which it plans to reduce its workforce by around 15 per cent and cut car plants to 10 from 17 globally. Sources told Reuters this month that Nissan is considering plans to shut two car assembly plants in Japan and overseas factories, including in Mexico, and stop production in South Africa as part of its cost-cutting plan.
Economic Times
4 days ago
- Automotive
- Economic Times
Nissan plans $7 billion funding, including loan backed by UK government: Report
Nissan is reportedly exploring raising over 1 trillion yen through debt and asset sales, including a UK government-backed syndicated loan. The automaker is considering issuing convertible securities and bonds, alongside potentially selling stakes in Renault and AESC Group, as well as plants in South Africa and Mexico. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Japan's struggling Nissan is considering raising more than 1 trillion yen ($7 billion) from debt and asset sales which would include a syndicated loan guaranteed by the UK government, Bloomberg News said on country's third-biggest automaker plans to issue as much as 630 billion yen worth of convertible securities and bonds, including high-yielding U.S. dollar and euro notes, Bloomberg News said, citing documents it had is also considering taking out a 1 billion pound ($1.35 billion) syndicated loan guaranteed by UK Export Finance, the report report said Nissan is also looking at selling part of the stakes it holds in French automaker and long-standing alliance partner Renault and in battery maker AESC Group, as well as plants in South Africa and for Nissan and UK Export Finance did not respond to a request for News cited sources as saying that Nissan's board did not appear to have approved the funding proposal yet, leaving it unclear whether it would proposal was also slated to include the rollover of some debt, the report this month, the company presented a sweeping cost-cutting plan under which it plans to reduce its workforce by around 15% and cut car plants to 10 from 17 told Reuters this month that Nissan is considering plans to shut two car assembly plants in Japan and overseas factories, including in Mexico, and stop production in South Africa as part of its cost-cutting shares rose more than 4% following the report but they gave up most of those gains and were last trading up 0.6%.
Japan Times
4 days ago
- Automotive
- Japan Times
Nissan seeks to raise $7 billion with backing from U.K. government
Nissan, which is facing a huge wall of loan repayments next year, is seeking to raise more than ¥1 trillion ($7 billion) by issuing debt and selling assets to keep its operations on track, according to internal documents. The struggling Japanese automaker plans to issue as much as ¥630 billion in convertible securities and bonds, including high-yielding dollar and euro notes, the documents show. Nissan also plans to take out a £1 billion ($1.4 billion) syndicated loan, guaranteed by U.K. 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. Espinosa presented the options to the board earlier this month, people familiar with the matter said, with the goal of securing some funding within the quarter ending 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, declining to be identified discussing details that are private. The proposal is also slated to include the rollover of some debt. Representatives for Nissan didn't immediately respond to a request for comment. A spokesperson at U.K. Export Finance said in a statement that the organization does "not comment on speculation around specific transactions.' 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 U.S. tariffs remaining in place and no further cash injections. Nissan has sufficient capital of about ¥2.2 trillion in cash on hand and credit to last the next 12 to 18 months, Espinosa said 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. Along with its group firms, Nissan is facing around $5.6 billion of debt due next year, the most in compiled data going back to 1996. The internal documents also show that Nissan expects to see an operating loss of as much as ¥450 billion for the 12 months through March 2026 if higher tariffs remain in place. Without tariffs, the loss is forecast to be ¥300 billion. Either would mark the biggest operating deficit in the company's history. Espinosa announced plans earlier this month to eliminate 20,000 jobs and close seven of Nissan's 17 plants by March 2028 after the company reported a ¥671 billion net loss for most recent fiscal year. The measures follow the collapse of talks earlier this year to join forces with Honda. Those discussions ended in part due to disagreements about Nissan's willingness to make deeper cuts to production and personnel. Nissan will close two factories in Japan, as well as locations in four other countries as part of its restructuring and cost-cutting process, the Yomiuri Shimbun and other news outlets have reported, citing unidentified sources. In Japan, the targeted facilities are in Oppama and Hiratsuka in Kanagawa Prefecture, near Yokohama, and represent about 30% of domestic production. Various financial institutions have been lined up for the £1 billion in loans backed by U.K. Export Finance, which mainly supports British exporters. It will comprise one of the largest components of Nissan's planned fundraising. In the past, the agency has helped to secure financing for high-speed rail construction in Turkey and infrastructure in Angola. Nissan operates Britain's largest automaking hub in Sunderland, and has committed to boosting 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 this month, AESC announced plans to push ahead with a second battery factory in Sunderland after getting financing support from U.K. 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. The recent U.K.-U.S. trade deal could offer some reprieve to Nissan if it's able to export cars without incurring tariffs from Sunderland, which has an annual capacity of 500,000 units. U.S. President Donald Trump's 25% tax on all vehicles imported into the U.S., which took effect in April, has cast a shadow over most global automakers. It would be costly for all of Japan's export-heavy carmakers, and especially painful for Nissan given its precarious financial state. Nissan has said it has ¥2.1 trillion in unused credit lines in addition to its own liquid reserves, but cash flow turned negative in its latest fiscal year and ratings agencies have cut the company's creditworthiness status to junk.
