DETROIT -- Ailing Japanese automaker Nissan Motor Co. is under mounting
pressure from Wall Street to find a savior soon.
Major credit rating firms warned Nissan on Wednesday its investment
grade rating will be lowered to "junk status" if it isn't rescued soon
by a wealthy automaker.
"Their cash position is considerably weak compared to other
automakers and we prefer that our credit review not go beyond 90 days,"
David Andrews, senior analyst for Moody's Investor Service, said
Wednesday.
Moody's -- citing Nissan's high debt and Japan's deepening recession
-- placed Nissan's credit worthiness under review for a possible
downgrade on Nov. 16.
On Monday, Standard & Poor's warned that Nissan's credit rating
would fall below investment grade if efforts to obtain a cash infusion
from another automaker were not successful within the next several
months.
The warnings may fuel a bidding war for all or part of Nissan and
its Nissan Diesel truck affiliate, experts say.
DaimlerChrysler AG Co-Chairmen Juergen Schrempp and Robert Eaton,
armed with more than $20 billion in cash, have openly courted Nissan and
its diesel truck affiliate for months. DaimlerChrysler may soon put a
formal offer on the table, analysts say.
"I would be surprised if the investment was anything but 33.4
percent," Andrews said.
Under Japanese law, a 33.4-percent stake would give an investor
control without assuming liability for Nissan's staggering debt -- $32
billion. Ford Motor Co. has similar control over Japan's Mazda Motor Co.
Also fueling speculation DaimlerChrysler has a bid on the table for
Nissan: Gary Valade and Thomas Stallkamp, members of DaimlerChrysler'
board of management, were in Japan last week.
DaimlerChrysler won't comment.
French automaker Renault SA is expected to make a bid for a Nissan
stake by next week.
A 33.4-percent equity stake in Nissan would cost an automaker $2.5
billion to $3 billion, analysts say.
Nissan, reeling from weak sales in Asia and North America, is
expected to post losses as high as $200 million for 1998.
In a related matter, Japanese newspapers reported today Nissan
Diesel will shut down its second-largest factory and boost job cuts to
3,000 from 2,500 to restore profits. |
