Mitsubishi Motors Corp. is drawing up a restructuring plan that will involve a fresh cash injection and alliances with other automakers, according to the Associated Press.
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The automaker is expected to announce the new revival plan by the end of January, which reportedly will include a multibillion dollar capital increase, AP added.
The news agency noted that Tokyo-based Mitsubishi Motors has been scrambling to develop a new business strategy since DaimlerChrysler said last year it would not invest more funds in the money-losing automaker. In May, MMC announced a recovery plan based on nearly 500 billion yen ($US4.9 billion) in cash infusions from the Mitsubishi group of companies, which range from a bank to an electronics maker and hold stakes in one another.
However, AP added, the carmaker has struggled to carry out the plan, especially after it disclosed in June that it had not kept a promise from 2000 to stop hiding vehicle defects. The automaker has had to announce more than 40 new recalls and acknowledge that its systematic cover-up extended back at least 25 years.
Mitsubishi Motors spokesman Junji Nishihata told the Associated Press the firm said would announce its new plan by the end of January, but hadn’t yet settled on a date.
“We are considering an additional capital increase in addition to partnerships, but at the present time nothing has been decided,” Nishihata reportedly said.
According to the AP report, the automaker did not disclose what kind of alliances it would be announcing, but Nishihata said a new agreement for Mitsubishi Motors to supply 36,000 minicars to Nissan Motor each year was “a good example” of the kind of relationships it sought.
AP said that business newspaper Nihon Keizai Shimbun had reported that three Mitsubishi group companies were in final negotiations to inject a combined 250 billion yen ($2.45 billion) into the troubled car maker.
Mitsubishi Tokyo Financial Group, Inc., one of Japan’s largest banks, and Mitsubishi Corp., a trading company with dealings in everything from natural gas to convenience stories, will each invest 100 billion yen ($98 million), the newspaper reportedly said.
Mitsubishi Heavy Industries Ltd., which spun off Mitsubishi Motors in 1970, was discussing contributing 50 billion yen ($490 million), the newspaper said, according to the Associated Press.
Mitsubishi Motors intends to support the plan with a 50 billion yen ($490 million) loan it has already requested from the state-run Development Bank of Japan, the newspaper reportedly said.
DBJ spokesman Tetsuro Murata told AP he could not comment on individual cases.
