Mitsubishi Motors has dismissed as speculation a Japanese newspaper report on Tuesday that the Mitsubishi corporate parent company and DaimlerChrysler plan a Y200 billion aid package.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
According to Dow Jones, the Nihon Keizai Shimbun said the companies will provide the capital infusion by March 31 in exchange for newly issued preferred shares. An initial plan called for Y100 billion in aid, but the package was increased to Y200 billion to cover the development costs of new models for next fiscal year and beyond, the report said.
A Mitsubishi Motors spokesman told Dow Jones: “We have nothing to announce at present,” and would not to comment on whether the company is considering any financial aid.
According to Dow Jones, the Nikkei report said DaimlerChrysler was expected to supply about Y70 billion, with Mitsubishi Corp., Mitsubishi Heavy Industries Ltd. and Mitsubishi Tokyo Financial Group Inc.’s Bank of Tokyo- Mitsubishi collectively providing another Y70 billion with the remaining capital to come from other Mitsubishi group firms. The shareholders’ stakes in Mitsubishi Motors wouldn’t change because the capital injection would take place through the issuance of nonvoting preferred shares, the report added.
The Nikkei report said that Mitsubishi Motors has been struggling, particularly in the US market, its earnings have deteriorated and it faces liquidity difficulties.
Mitsubishi group companies will also get involved in the automaker’s operations in order to help turn it around, the paper said, according to Dow Jones.
