TOKYO -- Japanese auto supplier Sanden Holdings said Tuesday it had filed for debt restructuring with its creditors as falling sales due to the coronavirus pandemic had made it difficult for the company to pursue its restructuring plans.
In a filing to the Tokyo Stock Exchange, the maker of vehicle air conditioning components and compressors said it would enter a so-called alternative dispute resolution, which allows financially stressed companies to reassess and restructure debt.
"Due to the impact of the coronavirus, output has fallen at our production bases, mainly in China, Europe and Asia or worse, plants have been shut down temporarily," the company said in the statement.
"Discussions with our creditors will include possible measures to rebuild our business, a timeline for the implementation of a business revitalization plan, and other details."
In the past decade, Sanden, which produced bicycle lamps in the aftermath of World War II and now operates plants in North America, Europe, and Asia including China, had been focusing on developing electric compressors and heat pump systems to be used in electric vehicles.
But the company which has supplied automakers including General Motors, Ford Motor Co. and Honda Motor Co., has struggled over the past five years, stung by global trade disputes which has led a downsizing of its operations.
It has posted annual net losses three times over the past four years including during the year just ended, while its cash position has deteriorated and its net assets have plummeted.
The company said that it was not facing liquidity issues currently, and that its creditors were willing to offer bridge loans. The turnaround proceedings would not affect its business with its suppliers and its clients, it added.