Nissan Motor Co. has managed to raise €6.9 billion from its creditors since April, in a bit to try and increase its cash position with the falling sales due to the coronavirus pandemic, according to its latest annual securities report.
The Japanese firm filed to the Japanese financial authorities on Monday, with the automaker claiming that it had raised €6.9 million (832.6 billion yen), with €5.87 billion (712.6 billion yen) being announced in May as a response to the impact of the COVID-19 pandemic.
Nissan, Japan’s second-biggest automaker, has been struggling to recover and become profitable once again after posting its first annual loss in 11 years.
The company was suffering from falling sales, a tarnished image, as well as a deteriorating cash position, even before COVID-19 spread throughout the globe.
The pandemic further reduced the company’s income, with there being a massive fall in global demand for cars.
New Chief Executive Makoto Uchida, has pledged to cut 300 billion yen (€2.47 billion), from its fixed costs within four years, also massively cutting from Nissan’s production capacity and the vehicle model range by around one fifth of the total.
Uchida became President and CEO of Nissan on December 1 2019, succeeding Yasuhiro Yamauchi, who had lasted less than three months in the position after tensions with alliance partner Renault.
After unveiling Nissan’s recovery plan late in May, Uchida stated that improving the cash flow would be one of Nissan’s biggest challenges, yet the company seems to have made improvements in that regard, with it expecting a positive free cash flow in the second half of the current financial year.
This is extremely impressive when compared with the negative 641 billion yen (€5.28 billion) in the financial year ending in March.
Apart from the funding from creditors, Nissan has also said that it has 1.1 trillion yen (€9.06 billion) in net cash in its automotive business.
However, the Japanese company has also made it clear that more funding might be required in order to soften the blow of the pandemic, especially if it continues to influence sales in the near future.
During the March-May period, Nissan managed to post a staggering 40% year-on-year fall in global sales, with global automakers having to close several vehicle manufacturing plants as well as car dealerships due to the pandemic.