As part of their alliance, Mitsubishi Motors Corp. said it would issue convertible bonds totalling 25 billion yen to DaimlerChrysler AG, reports Bloomberg News (14/7/00).
The article cites Mitsubishi Motors` Senior Executive Officer Junji Midorikawa as saying in an interview that these bonds will then be converted to Mitsubishi shares once a certain level has been reached. Mitsubishi will redeem the bonds with cash if the shares do not reach that particular level.
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Bloomberg also reports says that Mitsubishi will use `more than half` of DaimlerChrysler`s 250 million yen cash investment to reduce debt, with the remainder invested in developing its 1.1 to 1.5 litre-engine compact `Z` car, jointly developed by DaimlerChrysler.
