Mitsubishi Heavy Seen Giving 220-B.-Yen Aid to Aircraft Unit
Tokyo, Oct. 23 (Jiji Press)--Mitsubishi Heavy Industries Ltd. <7011> is planning to provide 220 billion yen in financial support to Mitsubishi Aircraft Corp., the developer of the Mitsubishi Regional Jet, the first Japanese-developed small passenger jet, informed sources said Tuesday.
With the aim of providing the financial aid by the end of December, the major Japanese heavy machinery maker plans to reach a final decision in late October at the earliest, the sources said.
Of the 220 billion yen, 170 billion yen will be used for a debt-for-equity swap in which Mitsubishi Heavy will receive new Mitsubishi Aircraft shares in exchange for abandoning a part of loans to the aircraft unit from the parent company.
The remaining 50 billion yen will be used to forgive debts owed by Mitsubishi Aircraft to Mitsubishi Heavy.
Mitsubishi Aircraft saw its debts exceed assets by 110 billion yen at the end of March due to a delay in the development of MRJ.
[Copyright The Jiji Press, Ltd.]