Nissan To Sell Aerospace Unit
TOKYO (AP) _ Japanese carmaker Nissan Motor Co. said Monday that it will sell its aerospace division to cut debt and focus on its ailing automotive business.
The affiliate of France’s Renault SA will sell its aerospace business to Japanese heavy-equipment maker Ishikawajima-Harima Heavy Industries on July 1, pending approval by its shareholders and government regulatory officials, the company said in a statement. Nissan did not disclose terms of the sale. The division accounts for about 3 percent of Nissan’s overall sales.
``The sale of the aerospace division is one further step aimed at achieving lasting growth, improving profitability and reducing its debt,″ the company said.
Nissan, headed for its seventh group net loss in eight years, has about $27.3 billion in outstanding bonds and other interest-bearing debt.
Nissan said in February that it was in talks to sell the aerospace unit, which makes engines for the nation’s H-2 rockets.
The Nihon Keizai Shimbun, Japan’s main business daily, reported in February that Nissan would sell the aerospace unit to Ishikawajima-Harima for $377 million.
Nissan said about 1,000 employees who work for the aerospace unit, or about 2.5 percent of the company’s 40,000-member parent work force, would move to IHI. The parent work force does not include domestic or foreign subsidiaries.
In the fiscal year that ended March 31, 1999, Nissan generated $472 million in revenue from its aerospace division.
France’s Renault SA in May purchased a 37 percent stake in Nissan, Japan’s second-largest automaker. Carlos Ghosn, the company’s Renault-appointed president, announced a plan in October to cut 16,500 jobs in Japan starting in the fiscal year beginning April 1, 2002.
Nissan’s shares rose 16 yen, or 15 cents, on Monday to close at 476 yen, or $4.49.