Pressured by coronavirus, Japan auto supplier Sanden Holdings files for debt relief (updated)
30/06/2020 10:48
(Adds details on proceedings, background on Sanden's struggles)
TOKYO, June 30 (Reuters) - Japanese auto supplier Sanden
Holdings 6444.T on Tuesday said it had filed for debt
restructuring with its creditors as falling sales due to the
coronavirus pandemic had made it difficult for the company to
pursue its restructuring plans.
In a filing to the Tokyo Stock Exchange, the maker of
vehicle air conditioning components and compressors said it
would enter a so-called alternative dispute resolution, which
allows financially stressed companies to reassess and
restructure debt.
"Due to the impact of the coronavirus, output has fallen at
our production bases, mainly in China, Europe and Asia or
worse, plants have been shut down temporarily," the company said
in the statement.
"Discussions with our creditors will include possible
measures to rebuild our business, a timeline for the
implementation of a business revitalization plan, and other
details."
In the past decade, Sanden, which produced bicycle lamps in
the aftermath of World War and now operates plants in North
America, Europe, and Asia including China, had been focusing on
developing electric compressors and heat pump systems to be used
in electric vehicles.
But the company which has supplied automakers including
General Motors Co GM.N , Ford Motor Co F.N and Honda Motor Co
7267.T , has struggled over the past five years, stung by
global trade disputes which has led a downsizing of its
operations.
It has posted annual net losses three times over the past
four years including during the year just ended, while its cash
position has deteriorated and its net assets have plummeted.
The company said that it was not facing liquidity issues
currently, and that its creditors were willing to offer bridge
loans. The turnaround proceedings would not affect its business
with its suppliers and its clients, it added.
(Reporting by Naomi Tajitsu, editing by Louise Heavens)
((naomi.tajitsu@thomsonreuters.com; +81364411078; Reuters
Messaging: naomi.tajitsu.thomsonreuters.com@reuters.net))