Print

Mail

wiki links

Crisis-stricken Mitsubishi Motors seeks more money

PHOTO: EPA

Crisis-hit Mitsubishi Motors Corp said yesterday it will seek more money for its survival plan, raising the total to ?546 billion (US$5.1 billion) from the original ?450 billion.

Japan's fourth-largest carmaker, reeling from the fallout of a series of vehicle defect cover-ups, has been forced to look for funds from the Mitsubishi conglomerate and other investors after its major shareholder DaimlerChrysler decided against injecting any fresh capital in April.

Mitsubishi group companies and a Taiwanese business partner have already put up ?295 billion.

Another ?250 billion will come from Tokyo-based Phoenix Capital and JP Morgan, up from their original contribution of ?170 billion, in return for preferred shares at ?100 per share.

A group firm will put up another ?1 billion in return for shares.

"In addition to the capital injection, our business cash flows and savings will bring the total business revival fund to more than ?1 trillion," MMC chief executive Yoichiro Okazaki told an annual general shareholders' meeting.

"The company is under extremely severe financial strains."

Yoichiro Okazaki, Mitsubishi Motors Corp chief executive

"Of the total, we plan to spend ?720 billion on capital investment, research and development and restructuring," he said.

Earlier Okazaki, who has recently moved from Mitsubishi Heavy Industries, opened the AGM with an apology.

"I would like to offer my deep-est apologies for causing great concern and trouble among shareholders, customers and many other people," Okazaki said.

He sought approval from shareholders for the revised survival plan by saying: "The company is under extremely severe financial strains."

Several disgruntled and distressed shareholders challenged the management.

One elderly shareholder, who only identified himself as Yamada, told the meeting that he had an unrealized loss of several million yen on Mitsubishi shares, which have fallen sharply in light of belated recalls and the arrest of executives over a series of vehicle defect cover-ups.

"Please stake all of your own assets and your life on reviving the company," he said.

"If you cannot do so, you should resign," he told the meeting to applause.

Mitsubishi Motors announced this month that it was recalling more than 500,000 cars globally.

Its truck affiliate, Mitsubishi Fuso Truck and Bus Corp, owned 65 percent by DaimlerChrysler, is also recalling hundreds of thou-sands of vehicles after admitting to cover-ups of defective parts, some of which have led to fatal accidents.

The transport ministry has decided not to buy new vehicles from MMC or Mitsubishi Fuso for the 18 months to December next year. Many regional authorities have already announced similar moves.
This story has been viewed 1812 times.