Japanese government exposed to 40% of $ 6.7 billion Nissan loans: sources

The Japanese government guaranteed the bulk of a loan to Nissan Motor Co from the Development Bank of Japan (DBJ), a source said, raising its guarantee to more than 40% of the 713 billion yen (6.7 billion yen). of dollars) of financing for the Japanese n ° 2. Car manufacturer.

The hefty government guarantee suggests financial companies are cautious about helping fund the automaker as it seeks to return to profitability and stop bleeding money.

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The government has guaranteed 104 billion yen of the 180 billion DBJ loans, said the source with direct knowledge of the matter who declined to be identified because the information is not public.

DBJ and Nissan declined to comment. The Ministry of Finance could not immediately be reached for comment.

Three other sources told Reuters in May that the government would guarantee part of a loan from Mizuho Financial Group Inc, aimed at helping Nissan weather the Covid-19 pandemic.

The two guarantees, if confirmed, would put the government on the hook to the tune of 304 billion yen, or 43% of the total loans that Nissan has obtained from its major lenders to deal with the Covid-19 pandemic, according to Reuters calculations.

Nissan also got 120 billion yen from Mitsubishi UFJ Financial Group and 50 billion yen from Sumitomo Mitsui Financial Group, the sources told Reuters. The government has not guaranteed any part of these loans, the sources said.

Nissan pledged to cut its annual fixed costs by 300 billion yen and become a smaller, more efficient company after the pandemic exacerbated a decline in profitability that peaked with its first annual loss since fiscal 2008 in during the fiscal year ended in March.

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