Mitsubishi Motors Corp. will become an affiliate of Mitsubishi Heavy Industries as part of the group’s effort to rescue the ailing auto maker, the Nihon Keizai Shimbun reported on Thursday, according to Reuters.
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Mitsubishi Heavy, which originally spun off MMC in 1970, reportedly would buy another 50 billion yen ($US481 million) worth of shares in its sister company, raising its stake to above 15% from a little less than 10% now.
Its chairman, Takashi Nishioka, would replace Yoichiro Okazaki as MMC’s chairman, while Osamu Masuko, a managing director at MMC sent in from trading house Mitsubishi Corp., would become president, unseating Hideyasu Tagaya, the business daily said, according to Reuters.
A Mitsubishi Heavy spokesman told the news agency nothing had been decided on the reported matter. MMC reportedly said the article was based on speculation and declined to comment. Japan’s only loss-making auto maker will unveil a new revival plan – including its second major aid package in eight months – on Friday, Reuters noted.
The news agency also noted that financial sources have said the three core Mitsubishi group firms planned to pour up to 300 billion yen more into MMC – that would be on top of the 496 billion yen MMC received from the group and other investors last year.
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By GlobalDataThe Nihon Keizai reportedly said the new capital from three companies – including a 50 billion yen debt-for-equity swap by one – would lift their combined stake in MMC to more than 33.4%, but coming under Mitsubishi Heavy’s umbrella would do little more than temporarily restore the financial market’s confidence in MMC’s financial health, and it remained to be seen whether MMC would be able to fix its core business, which is reeling under a weakened brand image.
