(Reuters) - Japanese carmaker Mitsubishi Motors Corp (7211.T) plans to offer about 200 billion yen ($2 billion) in shares to the public and use the proceeds to buy back preferred shares it issued in the past to four group firms, the Nikkei said.
Mitsubishi Heavy Industries Ltd (7011.T), Mitsubishi Corp (8058.T), Bank of Tokyo-Mitsubishi UFJ, and Mitsubishi UFJ Trust and Banking Corp MTFGTB.UL own around 380 billion yen in preferred shares issued by the automaker in exchange for capital infusions, the Japanese business daily said.
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 covering up safety defects.
Around 300 billion yen worth of the preferred shares owned by the four companies are slated to be retired or converted into common stock this year, the paper said.
The Nikkei said Mitsubishi Motors is negotiating to buy back the preferred shares at a price below their book value, and is thus expected to pay less than 200 billion yen.
A portion of the proceeds from the public offering will be used for construction of new factories in Indonesia and the Philippines, the business daily said.
($1 = 99.9850 Japanese yen)
Reporting by Krithika Krishnamurthy in Bangalore; Editing by Maju Samuel