Crisis-ridden Mitsubishi Motors Corp. (MMC) is in final talks with Mitsubishi Group to receive 450 billion yen ($3.93 billion) in aid, including a capital boost and debt-equity swap, sources familiar with the talks said, according to a Reuters report.
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MMC needs cash for new models and restructuring following DaimlerChrysler’s shock decision not to proceed with a refunding and restructuring plan that was backed by DC CEO Jurgen Schrempp but rejected by the board.
As a result, the carmaker has been negotiating bail-out plans with other big shareholders including Mitsubishi Corp., Mitsubishi Heavy Industries and the Bank of Tokyo-Mitsubishi.
According to Reuters, the new plan involves the three companies each taking 40 billion yen of newly issued preferred shares each, while other Mitsubishi group companies will take more than a combined 30 billion yen.
As a result, the Mitsubishi group, which holds a combined 32 percent in the automaker, will account for more than 150 billion yen of the capital infusion, the sources told Reuters.
As part of the restructuring plan, it is understood that MMC will close one of its under-utilised domestic plants, transferring production of the Pajero sport utility in Gifu prefecture to the Okayama plant, also in central Japan.
The Yomiuri Shimbun newspaper said on Monday that Mitsubishi Motors would slash 9,000 jobs, or about 20 percent of its workforce.
The headcount will fall at MMC plants in North America and its headquarters in Japan. The company’s Australian plant will be closed in a second round of restructuring, with 3,200 jobs going, the paper said.
Australia’s Federal Industry Minister Ian Macfarlane and South Australian Treasurer Kevin Foley will meet Mitsubishi executives later on Monday to discuss the restructuring plan, an MMC spokesman said, according to Reuters.
To reduce vehicle development costs, Mitsubishi Motors will also discontinue some models other than its core small cars and sport utility vehicles, the sources said.
