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ECONOMY

Nissan received record 130 bil. yen state loan guarantee

  • September 7, 2020
  • , Kyodo , 6:14 p.m.
  • English Press

TOKYO – Nissan Motor Co. received a record 130 billion yen ($1.2 billion) loan in May from the Development Bank of Japan with a state guarantee as part of its coronavirus relief fund, sources familiar with the matter said Monday.

 

The guarantee covers part of the 180 billion yen loan that the state-affiliated financial institution extended to help the struggling Japanese automaker weather the pandemic’s blow to sales already hurt by restructuring following the aggressive expansion sought by former boss Carlos Ghosn. If Nisan defaults on the loan, the government will shoulder up to 80 percent, or about 100 billion yen, of the guaranteed portion of the loan.

 

The DBJ judged that the loan should be extended swiftly due to the potential impact from Nissan’s woes on local economies such as jobs at suppliers, according to the sources.

 

Nissan reported a net loss of 671.22 billion yen in the business year ended in March, the first full-year red ink in 11 years.

 

In March, the government launched a scheme to extend loans to companies stung by the coronavirus outbreak via financial entities such as the DBJ.

 

While the DBJ provided about 1.8 trillion yen in loans to large and midsized companies as of the end of July, the loan to Nissan is the only one with a state guarantee, the sources said.

 

During the financial crisis following 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, causing the state to shoulder about 47 billion yen.

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