June 3 2009.

Long-term debt grew to more than 36% of Yamaha's interest-bearing liabilities at the end of March from the mid-12% level six months earlier as the motorcycle manufacturer topped up its working capital with loans.

From Sept. 30, 2008, to March 31 this year, Yamaha's debt more than doubled to 505.1 billion yen - the most in 10 years. Long-term debt, defined as a having a maturity of more than one year, ballooned more than sixfold over the same period to 182.8 billion yen. Yamaha borrowed more from domestic banks and took advantage of low-interest government financing, including a roughly 35 billion yen loan from the Japan Bank for International Cooperation.
As a result, Yamaha's cash on hand more than doubled to 209.5 billion yen. The firm is facing uncertain demand for all types of motor sports equipment and is in the midst of restructuring.

"We needed to keep the equivalent of about two months' sales on hand at all times," says Kozo Shinozaki, general manager of the finance and accounting division.

Yamaha is projecting a 30 billion yen group operating loss for fiscal 2009, which ends December, its first negative result in 26 years, and is working to cut costs. But demand shows no signs of improving, according to Shinozaki.

Source: NikkeiNet.