By Kentaro Sugiyama and Yoko Kubota
May 22 (Reuters) – Mitsubishi Motors Corp is taking
steps toward resuming dividend payments after nearly a
decade-long turnaround bankrolled by other Mitsubishi group
companies, according to people with direct knowledge of the
plans.
Specifically, Mitsubishi Motors is considering asking
shareholders to approve plans for a 10-for-1 reverse stock
split, the sources said.
At the same time, Mitsubishi is considering whether to ask
shareholders to approve a capital reorganisation, a change in
accounting that would make it possible to resume dividend
payments.
The plan under consideration would clear the company’s more
than 920 billion yen ($8.9 billion) in accumulated losses by
reducing capital stock by an equivalent amount, a common step
for Japanese companies with a history of deep losses that have
returned to profitability and want to begin paying dividends.
A spokesman for Mitsubishi Motors said the company had no
immediate comment.
No final decision has been made but Mitsubishi Motors could
announce the first of the steps as soon as Friday and put it
before shareholders at the annual meeting at the end of June,
according to the sources.
Taken together, the steps under consideration are intended
to close a chapter that began with a 2004 bailout for Mitsubishi
Motors.
Over the past decade, Japan’s seventh-largest automaker has
struggled with failed tie-ups with Daimler AG and
Chrysler, quality and safety problems and the costs of being a
niche player in the global market for cars and light trucks.
Mitsubishi Motors forecast a record operating profit for the
financial year to next March, helped in part by a weaker yen.
Shares in the company have gained over 260 percent since the end
of November to 183 yen at Wednesday’s close.
Although Mitsubishi has a strong position in Thailand and
other Southeast Asian markets it has struggled in Europe and the
United States, where it operates a plant in Illinois it hopes to
use as a hub for exports.
Osamu Masuko, who has served as Mitsubishi Motor’s president
for 10 years, said in late April he wanted to see the automaker
move toward resuming dividend payments.
“As we work through our plan, I want to resolve a question
that has been pending for many years and set a time frame for
the resumption of dividends,” Masuko told reporters.
Mitsubishi group companies – including MUFJ,
Japan’s largest bank, Mitsubishi Corp, and Mitsubishi
Heavy Industries, the three architects of the
Mitsubishi Motors rescue – control 34 percent of the automaker’s
voting shares.
Mitsubishi group companies stepped in to rescue Mitsubishi
Motors in 2004 by taking the bulk of a preferred share offering.
The rescue plan came after the company’s then-president and
other employees were implicated in systemically covering up
safety defects.
Mitsubishi Motors’ best-selling models on a global basis are
the Triton pickup truck and the small SUV sold as both the RVR
and Outlander Sport. Global sales were down 1 percent in the
past fiscal year to 987,000 vehicles.
