Tokyo, Oct. 23 (Jiji Press) — Mitsubishi Heavy Industries Ltd. 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.
Mitsubishi Heavy President Shunichi Miyanaga has said that the company plans to resolve Mitsubishi Aircraft’s excess liabilities by the end of March 2019.
Meanwhile, Canadian plane maker Bombardier Inc. has filed a lawsuit with a U.S. district court against Mitsubishi Aircraft and others, seeking damages payment and an injunction against the use of trade secret by Mitsubishi Aircraft.
The Canadian company claims that Mitsubishi Aircraft received important information related to the certification of passenger aircraft from some former Bombardier employees that the Japanese firm and a partner company employed. The former Bombardier employees were involved in developing a small passenger jet at the Canadian firm.
In response to the complaint, Mitsubishi Aircraft said in a statement, “We strongly reject this lawsuit and find their (Bombardier’s) allegations and assertions without merit.”
Expressing its readiness to wage an all-out court battle, the company added that it sees “this lawsuit primarily as an attempt by Bombardier to stifle global competition.”
Mitsubishi Heavy said in a separate statement, “We, Mitsubishi Heavy Industries Group, continue to support Mitsubishi Aircraft and Mitsubishi Regional Jet Program, and will further ensure that this lawsuit has no impact upon MRJ Program and its progress.”