Nissan shares rose 11% on Friday after reports emerged that a Japanese group, including former Prime Minister Yoshihide Suga, plans to approach Tesla for a potential investment in the automaker.
The 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, News.Az reports, citing foreign media.
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.
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.
