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Business Deals

Nissan's battery unit entangled in China's debt crackdown

Cancellation of $900m sale leaves no new timeline in sight

AESC produces lithium-ion batteries for the Nissan Leaf.   © Reuters

TOKYO -- Nissan Motor's surprise cancellation of a battery unit sale to GSR Capital stemmed from circumstances beyond the Japanese automaker's control, clouding the outlook for reviving the deal anytime soon as government-imposed debt control measures in China hamper fundraising for businesses there.

Automotive Energy Supply Corp., which makes lithium-ion batteries for Nissan Leaf electric car, was set to be sold on Friday, in a deal in which Nissan and the NEC group would have both unloaded their 51% and 49% stakes in AESC.

Initially scheduled for the end of 2017, the transaction had already been delayed three times. Nissan was notified on the agreed-on closing date of Friday that GSR Capital lacked the funds to pay, the automaker said on Monday.

GSR Capital would not comment to Nikkei, saying it was not planning an announcement.

Estimated at 100 billion yen ($902 million), the deal would have been one Nissan's biggest business sales, along with its 2017 unloading of group supplier Calsonic Kansei to U.S. fund Kohlberg Kravis Roberts. But the automaker had well over 1 trillion yen in cash and deposits at the end of March, so the cancellation will likely have no immediate impact on its capital spending or research and development.

Nissan said in Monday's statement that it will "discuss and promptly announce the outlook" for the deal "as soon as the details are determined." But with GSR Capital currently silent on the next step, the automaker has little to go on.

AESC has also canceled changes to its management structure, and NEC has called off the sale of electrode-making unit NEC Energy Devices to GSR Capital.

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