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Marelli calls Nissan and Mizuho for help in inventory purchases

KKR-owned auto parts maker likely to have logged loss for fourth straight year

Marelli calls Nissan and Mizuho for help in inventory purchases

Auto parts supplier Marelli Holdings, owned by U.S. private equity giant KKR, has called on Nissan Motors for help in inventory purchases and requested Mizuho Bank and others to lengthen the grace period for its debt payments, Nikkei has learned.

The move comes amid a global supply chain crisis, which has hit Marelli’s cash flow. The company likely logged a fourth consecutive annual loss for the fiscal year ended December 2021.

Marelli asked Japan’s Mizuho Bank, which is one of its main trading banks, sometime before Tuesday for support and Mizuho has begun working with other financial institutions on concrete steps to assist it.

The auto parts maker is rushing to draft a business reconstruction plan, including additional investment from KKR, as well as possible collaborations with new business partners.

As of December 2020, Marelli had a total debt of about 1.1 trillion yen ($9.5 billion). Along with Mizuho, Marelli has dealings with around 30 financial institutions, including Sumitomo Mitsui Banking Corp.

Mizuho had downgraded the company’s credit rating by the end of 2021 and added an additional allowance for bad debt to Marelli’s account. The company has tens of billions of yen in debt repayments that will come due in March, but it is having difficulty securing funds and is thus seeking financial support, such as extending the repayment period.

The banks are considering the use of a turnaround alternative dispute (ADR) resolution, a type of voluntary debt workout.

Marelli was established in 2019 following a merger between Japan’s Calsonic Kansei and Italy’s Magneti Marelli.

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