Mitsubishi Motors on Monday said it would hold an extraordinary shareholders’ meeting in March, bolstering expectations that big shareholders would put up extra capital to support the troubled carmaker, Reuters reported.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The news agency added that shares in Japan’s fourth-largest carmaker soared 11.62% higher to close at 269 yen, making it the biggest percentage gainer in the Nikkei 225 average.
The company declined to comment to Reuters on the content of the meeting but the news agency noted that Mitsubishi Motors’ main shareholder, DaimlerChrysler, said earlier this month it was considering a capital increase for Mitsubishi but that it had no intention of boosting its 37% stake until the Japanese firm improved its finances.
A Mitsubishi Motors source has told Reuters that if other big shareholders such as Mitsubishi group firms bought stock in the company and other shares were offered to the market, there could be a capital increase without DaimlerChrysler lifting its stake in percentage terms.
Industry sources have also told Reuters that the restructuring carmaker, which has been badly hurt by problems at its US finance unit and which is to sell stock in its trucking arm to raise cash, has talked with other Mitsubishi group firms about a possible capital boost.
According to Reuters, analysts say that, even with a large capital boost, Mitsubishi will continue to struggle and some describe its three-year restructuring effort as a failure, given the amount of money it seems to want from shareholders.
Reuters noted that Mitsubishi Motors last week said it would sell a 22% stake in Mitsubishi Fuso Truck & Bus to DaimlerChrysler for 52 billion yen ($US489 million).
That funding is on top of around 130 billion yen it obtained in the initial Fuso spin-off and there is speculation that Mitsubishi will sell its remaining 20% stake in Fuso to Mitsubishi group firms, the report added.
“Mitsubishi gains some credibility but extra funds are not going to immediately lead to new vehicle sales and an improved performance,” Nomura Securities auto analyst Seiji Sugiura told Reuters.
Analysts also say that, with a less than dynamic vehicle model range, Mitsubishi Motors’ near-term outlook will be determined by how well it manages to clean up the mess at its US finance unit and how well it weathers the price war there, Reuters noted.
