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Mitsubishi Motors rescue may cost $4.8bn – Japanese report

The new recovery plan for Mitsubishi Motors Corp. (MMC) may cost shareholders and creditors as much as Y500bn or $4.8bn, according to the Japanese Nihon Keizai Shimbun newspaper.

The paper says principal shareholders Mitsubishi Corp. and DaimlerChrysler have decided to file for the application of the Japanese 'industrial revitalisation law' with the country's industry ministry to make it easier to reduce MMC's debts and eliminate surplus capacity. Mitsubishi Motors is also asking the governmental Development Bank of Japan for financial support to boost the final revival package to as much as 500 billion yen.

Senior DaimlerChrysler and Mitsubishi Corp. executives are expected to meet on 10 April to decide on their plans to turn around Mitsubishi Motors in the face of global sales, especially in North America, that have failed to meet the expectations of the company's initial recovery plan. The Kyodo News agency has reported that DaimlerChrysler and former sole MMC parent Mitsubishi Corp. would each buy 200 billion yen-worth of new shares issued by Mitsubishi Motors.

Mitsubishi Motors' global sales vice president resigned last week, his duties being temporarily assumed by CEO Rolf Eckrodt. He in turn, suggest several media, may be replaced by smart GmbH CEO Andreas Renschler, currently leading DaimlerChrysler's rescue team at MMC, though DaimlChrysler sources have suggested that Eckrodt will not be fired.

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