Nissan Motor has asked some suppliers to allow the company to delay payments in order to free up short-term funds, according to several emails and company documents reviewed by Reuters.

Ivan Espinosa, the new CEO who took office in April, has unveiled a plan to reduce Nissan’s global workforce by about 15% and close seven plants, aiming to cut costs by 500 billion yen (approximately 100 billion baht) within the next two years. Nissan, which has been suffering from declining sales and an outdated vehicle lineup, reported a net annual loss of more than 150 billion baht for the fiscal year ending in March and declined to provide a financial forecast for this year.

Currently, Nissan has asked some suppliers in the United Kingdom and the European Union to accept delayed payments, according to documents reviewed by Reuters and information from related sources. This move would allow Nissan to have more cash on hand at the end of the first quarter (April-June), similar to what the company did before the end of the previous fiscal year in March.

Requesting delayed payments from suppliers to free up cash is not uncommon. Nissan stated that the company has incentivized some suppliers to cooperate under more flexible payment terms, at no cost to them, in order to support its free cash flow. “Suppliers could choose to be paid immediately or opt for a later payment with interest,” Nissan said.

At the time of reporting, Nissan had approximately 2.2 trillion yen (around 450 billion baht) in cash on hand, but the company expects negative free cash flow of around 550 billion yen (about 112 billion baht) in this quarter alone. Nissan does not expect free cash flow to turn positive until next year or early 2027.

All three major credit rating agencies have rated Nissan’s long-term debt at “junk” or non-investment grade levels. If the company’s credit rating is downgraded further, it would make it more difficult and expensive for Nissan to access financing.

Junk debt = debt with a high risk of default that is rated below investment grade.

Reuters was unable to confirm whether Nissan had made similar requests to suppliers in other regions, how many suppliers were contacted, or the duration of the payment extensions requested.

Source: Reuters