Mitsubishi Motors, controlled 37 per cent by DaimlerChrysler, is thinking about selling a stake in its Mitsubishi Fuso truck and bus operation to help raise cash and reduce debt, the Financial Times (FT) said, citing banking sources.
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The FT said it understood that DaimlerChrysler may take a 30 percent stake in the company, leaving MMC with about 70 per cent, around half of which may be listed on the Tokyo Stock Exchange next year.
This would be the first big deal since DaimlerChrysler consolidated its management control of MMC by nominating its own long-term executive Rolf Eckrodt, MMC’s former chief operating officer, as president last week, the FT said.
The newspaper said such as deal would give DaimlerChrysler greater access to the Asian truck market, where Fuso is well established and respected, while also giving both companies significant cost-cutting opportunities while raising much-needed cash for MMC which has been rocked by a series of recall-related scandals in Japan.
The FT said MMC has total net automotive debt of about 1,000 billion yen ($US7.5 billion) and has been planning to spin off Fuso since Volvo purchased a three percent stake and agreed to acquire a further 19.9 per cent of Fuso and list it separately.
But, the newspaper said, that deal collapsed after DaimlerChrysler took a controlling stake in MMC and balked at selling a fifth of Fuso to a Swedish truck-making rival.
Interviewed by the FT, ING Barings car analyst Howard Smith said Volvo had agreed on 35.9 billion yen for the 19.9 percent stake of Fuso, valuing the company at about 200 billion yen.
An MMC official in Tokyo declined to comment to the newspaper about the proposed spin-off but reportedly said that one of the main benefits for Fuso from a deeper relationship with DaimlerChrysler would be access to the German company’s environmental technology.
The FT added that it understood that Goldman Sachs in Frankfurt has been appointed to advise on the proposed spin-off, and had previously advised Daimler on its so-called ‘merger’ with Chrysler.
