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Under pressure from coronavirus, Japanese auto supplier Sanden Holdings calls for debt relief, Auto News, ET Auto


Over the past decade, Sanden, which produced bicycle lights in the aftermath of the World War and now operated factories in North America, Europe, and Asia, including China, had focused on the development of electric compressors and heat pump systems for electric vehicles.

TOKYO: Japanese automotive supplier Sanden Holdings said on Tuesday it had filed a debt restructuring request with its creditors, as declining sales due to the coronavirus pandemic had made it difficult for the company to continue with its restructuring plans.

In a filing on the Tokyo Stock Exchange, the maker of vehicle air conditioning components and compressors said it would enter an out-of-court dispute resolution process, which allows financially troubled companies to reassess and restructure their debt.

“Due to the impact of the coronavirus, production has fallen at our production bases, mainly in China, Europe and Asia or worse, factories have been temporarily closed,” the company said in the statement.

“Discussions with our creditors will include possible steps to rebuild our business, a timeline for implementing a business revitalization plan and other details.”

Over the past decade, Sanden, which produced bicycle lights in the aftermath of the World War and now operated factories in North America, Europe, and Asia, including China, had focused on the development of electric compressors and heat pump systems for use in electric vehicles.

But the company that supplied automakers such as General Motors Co, Ford Motor Co and Honda Motor Co, has struggled for the past five years, plagued by global trade disputes that have resulted in downsizing of its operations.

It has recorded annual net losses three times over the past four years, including the past year, as its cash flow deteriorated and its net assets collapsed.

The company said it is currently not facing liquidity issues and that its creditors are ready to offer bridging loans. The reorganization process would not affect its business with its suppliers and customers, he added.

Read also: 16% drop in turnover in the automotive components industry in FY’21: CRISIL



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