Under coronavirus pressure, Japanese auto supplier Sanden Holdings seeks debt relief
TOKYO (Reuters) – Japanese automotive supplier Sanden Holdings 6444.T said on Tuesday that it had filed for debt restructuring with its creditors as declining sales due to the coronavirus pandemic had made it difficult for the company to pursue its restructuring plans.
In a filing on the Tokyo Stock Exchange, the maker of vehicle air conditioning components and compressors said it would enter into a so-called alternative dispute resolution, which allows companies in financial difficulty to reassess and restructure their debt.
“Due to the impact of the coronavirus, production dropped at our production bases, mainly in China, Europe and Asia or worse, factories were closed temporarily,” the company said in the statement.
“Discussions with our creditors will include possible steps to rebuild our business, a timeline for implementing a business revitalization plan and other details.”
For the past decade, Sanden, which produced bicycle lights in the aftermath of the World War and now operates factories in North America, Europe and Asia, including China, had focused on developing electric compressors and heat pump systems for use in electric vehicles.
But the company that supplied automakers, including General Motors Co GM.NFord Motor Co. FN and Honda Motor Co. 7267.Thas struggled for the past five years, dogged by global trade disputes that have led to a downsizing of its operations.
It has recorded annual net losses three times over the past four years, including in the year just ended, as its cash position deteriorated and its net assets plummeted. .
The company said it is not currently facing liquidity problems and its creditors are willing to offer bridge loans. The reorganization proceedings would not affect its business with its suppliers and customers, it added.
Reporting by Naomi Tajitsu, editing by Louise Heavens