Nissan continues to raise capital with attempted sale of Calsonic

[5 pm 2 Aug] Nissan Motor Co. needs money to pay for its recently-announced expansions in Smyrna and Decherd. That is one of the reasons that it is trying to sell its controlling ownership of one

Recently, Nissan president Carlos Ghosn publicly announced that his company is considering several divestitures. He specifically cited Calsonic Kansei Corp., a Tokyo-based company that makes radiators and air conditioners.

"Mr. Ghosn said that Nissan is reviewing several options, including the sale of Nissan's ownership of Calsonic," Nissan spokeswoman Gina Pasco told on Wednesday. "However, no final decision has been made, and it is under review right now."

At its current share price, Nissan's stake in Calsonic would raise about $200 million. Trade publications have already reported that publicly-traded auto parts maker Delphi Systems Inc. is conducting due diligence on Calsonic with the idea of buying it.

Over 1,100 people work at the Calsonic plant in Shelbyville, which produces heaters, radiators and air conditioners for the Nissan plant in Smyrna.

Nissan is considering selling its stake at Calsonic at a time when the company is re-examining its ownership of many assets. Last month, Nissan announced it was selling its 38% stake in Ikeda Bussan Co., a Japanese maker of automotive seats, for about $40 million.

In 1999, Renault SA bought a 37% stake in Nissan. Because Nissan's sales have sagged in Japan and done well in the U.S., Nissan's new leadership has taken steps to increase its manufacturing output in North America. Two weeks ago, Nissan's new management team announced that the company will increase output of its assembly plant in Smyrna and begin producing a new eight-cylinder engine in Decherd.

However, the company has still not said where it will build a new large truck that the company plans to build. reported two weeks ago that the company is considering building a new assembly plant, either in Tennessee or elsewhere in the Southeast.

In June, the Tennessee legislature passed a bill that gives an automatic $5,000 per person jobs tax credit to any company that invests $500 million in a facility that creates at least 1,000 new jobs that pay 150% of the state's average industrial wage. Another part of that same bill authorized the governor to give a $5,000 per person tax credit every year for 20 years if the investment is at least $1 billion. Numerous sources have told that the second part of the Nissan tax break was meant to give the state the ability to bargain for the assembly plant.

Mr. Ghosn will appear before the auto industry press at a press conference in Detroit on Thursday. However, he is not expected to make any announcements related to the company's expansion plans.