FYI. Might be tough for Evo 8 parts!
Matt Murray
DaimlerChrysler to quit Mitsubishi
Reuters / April 22, 2004
STUTTGART, Germany -- DaimlerChrysler AG said on Thursday it was
pulling out of Mitsubishi Motors, leaving its bid to become a
global carmaker in disarray and throwing the future of the ailing
Japanese firm into doubt.
The group said that it had decided not to participate in a rescue
capital increase planned by Mitsubishi Motors Corp. because it
could not agree on an acceptable deal with other shareholders in
the loss-making company.
It also said it would not provide any further financial support
to Mitsubishi, Japan's only unprofitable carmaker.
"This clearly means separation," a DaimlerChrysler spokesman
said, adding that the 37 percent stake would be booked as
discontinued business until a buyer could be found.
Mitsubishi representatives could not immediately be reached for
comment.
The decision came after an extraordinary meeting of the
DaimlerChrysler supervisory and management boards on Thursday.
Supervisory board sources said earlier that the company had
discussed selling its 10 percent stake in South Korea's largest
carmaker Hyundai Motor Co. Ltd., worth about 850 million euros
($1 billion), to help fund the Mitsubishi rescue.
Mitsubishi, Japan's fourth largest and only unprofitable
carmaker, had been planning to present details of a 700 billion
yen ($6.39 billion) bailout to shareholders on April 30.
Reeling from losses generated by a disastrous strategy of
offering cheap car loans in the U.S., Mitsubishi is expecting a
net loss of 72 billion yen for the 12 months to March 31. It had
a profit of 37.36 billion yen the previous year.
Mitsubishi Motors' net automotive debt stood at around 726
billion yen six months ago, while total interest-bearing debt was
1.141 trillion.
"This could be the end for Mitsubishi if nobody else injects
fresh capital," said one industry source.
DaimlerChrysler bought the stake in Mitsubishi over three years
ago with a view to expanding its presence in Asia. It has since
worked to establish closer production ties between the Japanese
firm and its other problem child, U.S. automaker Chrysler, to cut
costs.
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