TOKYO: Mitsubishi Motors Corp (MMC) shareholders approved at an EGM yesterday the appointment of a new president and chief executive, and the issue of new shares to raise badly needed new funds.
Mitsubishi Heavy Industries director Yoichiro Okazaki was confirmed as the new chairman, president and CEO of the embattled fourth largest Japanese automaker.
The meeting also approved the issue of up to 3.5 million new preferred shares with no voting rights to raise fresh funds. Mitsubishi group companies such as Mitsubishi Heavy Industries, Mitsubishi Corp and Bank of Tokyo-Mitsubishi are expected to buy the shares.
MMC's shares surged on that news, and reports, subsequently dismissed as unfounded by the company, that it planned to seek financial and other support from Toyota Motor Corp, the world's second largest automaker.
MMC shares closed up 28 yen or 11.4% at 273 yen on the Tokyo Stock Exchange. The rest of the auto sector fell in line with the blue-chip Nikkei 225 Stock Average, which tumbled 2% on fears of higher US interest rates and slowing growth in China.
Okazaki, 61, will take up the posts of president and CEO left vacant by the abrupt resignation on Monday of Rolf Eckrodt, who had been seconded to Mitsubishi from DaimlerChrysler, which controls MMC through a 37% ownership stake.
Eckrodt hurriedly resigned after last Thursday's surprise announcement by DaimlerChrysler that its board had decided against investing any more money in the floundering Japanese carmaker.
That decision triggered concern over how MMC can survive, given the scale of its problems and the loss of support of the German-American automaker, which until last Thursday had been expected to finance more than half of a 750 billion yen restructuring plan that MMC had intended to announce yesterday.
Okazaki indicated the situation confronting MMC was just that severe.
“I will do my utmost to rehabilitate the company as I recognise we are standing at an extremely important crossroads for survival,” Okazaki told 362 shareholders who attended the meeting.
“We will make a new start in order to make the company more transparent and trustworthy,” he said, adding that it would be “very important to change the corporate culture”.
MMC, which is expected to post a loss of 72 billion yen for the past year to March, has 1.1 trillion yen in debt and is suffering from sharply falling sales in the key North American market. Last year MMC sold 256,810 vehicles in the United States, down 25.6% from 2002. – AFX-Asia
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