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Mitsubishi Motors "needs €2 billion injection"

The Frankfurter Allgemeine Zeitung suggests this week that the ailing Mitsubishi Motors' revised mid-term recovery plan will require a €2 billion capital injection.

The paper suggests that the funding will be supplied by MMC's two big shareholders, Mitsubishi and DaimlerChrysler, while the latter will wish to increase its manufacturing links with MMC, typified by the new Colt model built alongside the smart 4four in The Netherlands.

DaimlerChrysler is however also reported to be concerned to avoid having to consolidate Mitsubishi's sickly financial results with its own as the result of taking a bigger stake than its current 37%. The objective might be met through the issue of preference shares.

The Frankfurter Allgemeine, whose report brought no comment from DaimlerChrysler, also suggests that Mitusbishi Motors will be required to reduce personnel and production costs by 10%, and that Andreas Renschler, the smart division CEO currently playing a company doctor role at MMC, is likely to replace DaimlerChrysler-nominated MMC CEO Rolf Eckrodt as early as this June. In view of falling sales volumes in the US, MMC recently revised its forecast loss for the quarter ending today, 31 March, to €561m.



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