Mitsubishi Plans to Offer $2 Billion in Shares to Bail Out Company

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Motors is hoping to raise $2 billion by offering new shares of the company on the Japanese stock exchange in the first quarter of 2014.

Mitsubishi is hoping to reorganize the company after Mitsubishi Financial, Mitsubishi Heavy Industries and Mitsubishi Corp. bailed Mitsubishi Motors out in 2004 and 2005. As payment, the companies received preferred shares, but Mitsubishi has not issued dividends since 1998 so the companies have not received any money for their investment, and the preferred shares have no voting rights Converting the preferred stock to common stock when the new stock is issued could repay the debt or at least give the investors a say in the company.

Mitsubishi says that it plans to issue dividends again at the end of the fiscal year in March 2014. It wants to decrease preferred stock as much as possible before then to decrease dividend payments.

Mitsubishi Motors stock is down 8.1% since the end of July, while the Nikkei stock average is down only 0.3% in the same period.

Despite a falling stock price, Mitsubishi is predicting net income to rise 32% at the end of the fiscal year. It has recently added a new factory in Thailand to meet demand in Southeast Asia. In Japan, it is working with NissanNissanJapan, 1932 > present159 models
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to develop small engines.

Mitsubishi began as a shipping firm in 1870. It now consists of 28 independently run businesses that work together has an informal group.

Source: Bloomberg