by Nissan asks suppliers for payment deferral
Japanese automaker Nissan has approached its European and British suppliers with a proposal to defer payments. According to internal documents, the company is trying to free up 150 million euros to improve short-term liquidity. This is part of a strategy aimed at stabilizing the financial condition after changes in management.
Suppliers are offered two options: receive payment on schedule or agree to a slight delay in exchange for additional compensation. In the first case, HSBC will act as an intermediary, paying funds to suppliers, and Nissan will later repay the bank the amount with interest.
Financial difficulties and future plans
“We are offering more flexible payment terms to ensure sufficient liquidity to support current changes and meet obligations,” Nissan stated.
The company is trying to move some payments from June to August or even September. A similar approach has been used before, particularly at the end of the last financial year. However, in Japan, Nissan was accused of underpaying suppliers, which contravenes local laws.
Nissan’s financial performance remains challenging: last year the company recorded losses, and credit rating agencies downgraded its debt to “non-investment” grade. As part of its recovery, Nissan plans to cut costs by $3.4 billion, close several plants, and lay off about 15% of its workforce. The goal is to achieve positive free cash flow by 2026.
Despite optimistic plans, the company will have to overcome serious challenges, especially considering the difficulty of attracting new investment after the credit rating downgrade. For now, Nissan is refraining from public forecasts for the current year, but internal sources expect it to be no less challenging than the last.
