Nissan Motor Co. has reached a basic agreement with Toyoda Automatic Loom Works Ltd. to transfer its water jet textile business to the founding firm of the Toyota Motor group, the two firms announced on Wednesday.
Nissan Texsys Co., a wholly owned Nissan subsidiary, will sell the machinery business in April to Toyoda Loom, the firm from which Japan's No. 1 automaker originated.
The price of the deal has not been decided yet, but it is likely to reach about half of the capital of Nissan Texsys, said Toyoda Loom spokesman Hiroyasu Takagi. Nissan Texsys is capitalized at 9 billion yen. The agreement is part of Nissan's restructuring efforts to focus its resources on automobile-related business, Nissan officials said.
The impact of the new deal is expected to be relatively small, given the huge scale of Nissan's goal of reducing interest-bearing loans by 1 trillion yen on a consolidated basis by March 2001.
For fiscal 1997, Nissan Texsys posted sales of 20 billion yen, with its water jet textile business accounting for between 70 and 80 percent, according to Nissan officials.
Toyoda Loom is the top shareholder of Toyota Motor Corp., Nissan's longtime rival.