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Mitsubishi plans 150b yen rescue for plant engineering firm Chiyoda: Nikkei
[TOKYO] Japanese trading house Mitsubishi Corp and MUFG Bank plan to rescue plant engineering company Chiyoda with a 150 billion yen (S$1.85 billion) lifeline, betting on a turnaround fuelled by greater liquefied natural gas (LNG) demand, the Nikkei newspaper reported on Monday.
Chiyoda, one of the world's leading builders of LNG plants, has struggled with losses after a hurricane hit its Cameron LNG project in the US state of Louisiana.
However, a global shift from coal is seen boosting the demand for natural gas, and Royal Dutch Shell has forecast the global LNG trade to rise 11 per cent to 354 million tonnes this year. Mitsubishi has said it expects such growth to also fuel a rise in LNG projects.
Mitsubishi, which has bailed out Chiyoda twice already and has a 33.4 per cent stake in the engineering company, will provide the bulk of the 150 billion yen lifeline through a private placement of new preferred shares and loans, the report said, without citing sources.
MUFG Bank, a part of Mitsubishi UFJ Financial Group, will provide additional financing, it said.
Chiyoda said it was in talks, but no decision had yet been made. It also said its full-year loss would likely be bigger than it previously forecast.