(Bloomberg) -- Nissan Motor Co. is seeking to sell a wholly owned subsidiary that distributes vehicle parts and materials in a deal that may be valued at about $1 billion, as the struggling Japanese automaker seeks to slim down, people familiar with the matter said.
The company has invited private equity and trading firms to bid for 100% of Nissan Trading Co., according to the people, who asked not to be identified because the information isn't public. The buyer may be selected by as early as October, according to the people. The target valuation includes assumed debt, they said.
A sale of the unit, which generated revenue of 676.1 billion yen ($6 billion) in the fiscal year ended March, would help Nissan free up cash to help turn around its broader business that's been hurt by slumping U.S. sales, aging vehicle models and an out-of-sync product cycle. The automaker stepped up restructuring measures in July, which also included 12,500 job cuts, after its operating profit hit a decade low.
The sale process is ongoing, and no agreements have been reached, the people said. Koji Okuda, a spokesman for Yokohama-based Nissan, said he couldn't immediately comment.
Earlier this week, Hiroto Saikawa stepped down as Nissan's chief executive officer after the board asked him to resign, with Chief Operating Officer Yasuhiro Yamauchi taking over until a permanent replacement is appointed by the end of October. The restructuring measures and management shuffle is part of the turmoil unleashed following the arrest of former Chairman Carlos Ghosn in November for alleged financial crimes. He has denied all charges and is awaiting trial next year.
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Nissan Trading, established in 1978, does business in South Korea, Mexico, India, the U.K., China and the U.S., with 37% of revenue coming from vehicle components and 47% from materials. Nissan shares pared a 1.1% decline to close at 713.9 yen in Tokyo, down 0.4%.
--With assistance from Tsuyoshi Inajima, Takako Taniguchi and Will Davies.
To contact the reporters on this story: Lisa Du in Tokyo at ldu31@bloomberg.net;Kae Inoue in Tokyo at kinoue@bloomberg.net
To contact the editors responsible for this story: Rachel Chang at wchang98@bloomberg.net, Reed Stevenson, Michael Tighe
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