Mazda Motor Corp, burdened with the second-worst credit rating among Japan’s carmakers and a 62 percent surge in short-term borrowing this fiscal year, plans to apply for government aid as it consumes cash.
“We can’t sell bonds right now,” said Nobuyoshi Tochio, general manager of Mazda’s financial services division. “The market isn’t functioning. Conditions are really bad.”
Mazda, Japan’s second-largest car exporter, used ¥174 billion (US$1.8 billion) in cash last quarter as sales of Mazda6 sedans plunged in the US and Europe.
The Hiroshima-based company may turn to the government for low-interest loans as its junk rating prevents it from following Toyota Motor Corp in tapping capital markets.
Mazda’s short-term borrowings, including leases, loans and bonds due this year, surged to ¥221 billion in the nine months ended December, exceeding the company’s untapped ¥200 billion credit line. The carmaker expects a ¥13 billion loss for the year ending this month and analysts forecast the loss will almost triple to ¥37.5 billion next fiscal year.
The company may apply to the Japan Bank for International Cooperation and Development Bank of Japan, both government-owned, for loans to bolster its cash position, Mazda’s Tochio said in an interview on Friday in Tokyo.
Mazda slashed production by at least 221,000 vehicles in the second half of the fiscal year, slowing down the rate it was burning cash.
“We’re adjusting inventory in the fourth quarter,” chief financial officer Kiyoshi Ozaki wrote in an e-mailed response to questions. “We’re aiming to have our cash flow at least break even this quarter.”
The company does not plan to use its ¥200 billion credit line in the fiscal year ending this month as it has enough cash, Ozaki said.
Mazda also added to its debt after it bought back 6.9 percent of its own shares from Ford Motor Co last year. Ford relinquished control over the smaller company, forcing it to do more development by itself.
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The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
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