Toyota looking for state aid of $2 billion

Toyota Motor Corp, forecasting its first loss in 59 years, is seeking loans from the Japanese government as private investors demand up to 50 per cent more in interest for the company's debt. (See: Toyota makes first annual loss in seven decades)

The company's financial unit may ask for 200 billion yen ($2 billion) in loans, public broadcaster NHK reported today, without citing anyone. Toyota Financial Services Corp. spokesman Toshiaki Kawai said the unit is in talks with state-owned Japan Bank for International Cooperation, without confirming the amount.

The Japan Bank for International Cooperation, which started helping cash-strapped Japanese businesses last year as the global financial crisis unfolded, said it does not comment on individual company matters. Some companies have been struggling for cash ahead of the fiscal year end of 31 March.

The Japanese finance ministry today said that it would provide an additional $5 billion from its foreign reserves this month to the Japan Bank for International Cooperation, to make sure there is ample cash available for needy businesses. Tokyo has about $1 trillion in foreign reserves.

Finance Minister Kaoru Yosano also said the ministry stands ready to raise the money pool available for lending in yen from 800 billion yen now to 1.2 trillion yen to help companies ride out the deepening global slump.

"Taking into account the current conditions for those trying to procure foreign funds, we've decided to lend foreign currencies (from reserves) to the JBIC as a temporary, extraordinary measure," Yosano was cited as saying.

The carmaker expects a net loss of 350 billion yen after vehicle sales in the US, traditionally Toyota's most profitable market, plunged 31 per cent last quarter. Incoming president Akio Toyoda is adding to the company's reserves as the global recession also forces General Motors Corp. and Chrysler LLC to get bailouts from the US government.

Toyota follows other carmakers seeking government help as sales plunge worldwide. GM has received $13.4 billion in US aid and is seeking more to keep its operations in its home market running through this month. Chrysler has also followed suit in seeking official aid, with Ford being the solitary one standing. (See: General Motors gets $4 billion US government loan, Chrysler still in talks / Chrysler receives $4 billion from US treasury)

France granted PSA Peugeot Citroen and Renault SA a total of 6 billion euros in five-year loans last month. In the UK, carmakers are seeking support for their finance units from the Bank of England. (See: France considers aid for Renault, Peugeot Citroën)

Mitsubishi Motors Corp. has gotten subsidies from Japan's Ministry of Health, Labour and Welfare to help pay wages, as it cuts domestic production. Nissan Motor Co. has said that it is considering various types of government aid, but it declined to say Tuesday whether it was requesting for Japan Bank for International Cooperation loans. Nissan has forecast a 265 billion yen net loss for the fiscal year through March.