London
22 °C
Manchester
Glasgow
Dublin
Belfast
17 °C
Washington
30 °C
Denver
Atlanta
Dallas
37 °C
Houston Texas
New Orleans
El Paso
Phoenix
Los Angeles
24 °C
40 °C
9 °C
30 °C
Nissan shares jump 11% on reported plan to seek Tesla investment / Photo: © AFP
Nissan shares jump 11% on reported plan to seek Tesla investment
Nissan shares surged 11 percent Friday after a report said a Japanese group including a former prime minister plans to ask US electric vehicle giant Tesla to invest in the automaker.
The reported proposal follows the failure of Nissan's merger talks with its rival Honda, seen as a bid to catch up with Tesla and Chinese companies in the competitive EV market.
The Financial Times cited three people with direct knowledge of the move who said ex-premier Yoshihide Suga supported the proposal to approach Tesla.
"The group is hopeful Tesla will become a strategic investor since they believe (it) is keen to acquire Nissan's plants" in the United States, the newspaper said.
Nissan declined to comment when contacted by AFP.
Ealier on Friday, Moody's downgraded the credit rating of Nissan to junk, saying the decision "reflects Nissan's weak profitability driven by slowing demand for its ageing model portfolio".
Nissan announced thousands of job cuts last year after reporting a 93 percent plunge in first-half net profit, and the firm now expects an annual loss of more than $500 million.
"Even if the company successfully executes its restructuring plan with cost reductions and new model releases, we do not expect free cash flow to turn positive until fiscal 2026 at the earliest," Moody's said.
It gave Nissan a rating of "Ba1", a category with high credit risk often described as junk.
Honda and Nissan's merger talks apparently unravelled after Honda proposed to make Nissan a subsidiary instead of a plan announced in December to integrate under a new holding company.
Suga, 76, served as prime minister from 2020-21 and was a close ally of assassinated ex-premier Shinzo Abe, Japan's longest-serving leader.
The Financial Times said the new proposal was being led by former Tesla board member Hiro Mizuno, and was also supported by a former aide of Suga.
It added that several Nissan board members were aware of the plan.
Reports in December said Taiwanese electronics behemoth Foxconn had unsuccessfully approached Nissan to buy a majority stake.
It then reportedly asked Renault to sell its 35 percent stake in Nissan -- a pursuit that was put on hold before the merger talks were announced.
"The proposal envisions a consortium of investors, with Tesla as the largest backer, but also includes the possibility of a minority investment by Foxconn," the Financial Times said.
G.Allen--SFF
