Mitsubishi Motors to raise up to $2.3B in share sale, resume dividend payments

January 7
4:46 AM 2014

Japanese automaker Mitsubishi Motors Corp. plans to raise as much as ¥241.6 billion ($2.3 billion) in a share sale. The said share sale is designed to help the company resume dividend payments for the first time in over 15 years.

Bloomberg, citing a regulatory filing, said that Mitsubishi will be selling up to 241 million common shares. Pricing of the shares will be determined as soon as January 22. Mitsubishi last year said it plans to use the proceeds to repurchase preferred stock held by other Mitsubishi companies before resuming dividends for common shareholders.

Mitsubishi hasn't been able to pay dividends since 1998 after accumulating billions of dollars of losses. It has been seeking to restore confidence in its cars for more than a decade after saying it covered up safety defects and customer complaints, the report said.

The automaker's losses required it to be bailed out by other Mitsubishi companies. Bailouts in 2004 and 2005 left Mitsubishi UFJ Financial Group Inc., Mitsubishi Heavy Industries Ltd. and Mitsubishi Corp. with billions of dollars of preferred shares, convertible into common stock, that never generated any dividends, Bloomberg said. 

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