Jan. 19, 2005; Bloomberg reported that Mitsubishi Motors Corp., Japan's fifth- largest carmaker, will ask other Mitsubishi group companies and banks for at least 500 billion yen ($4.9 billion) to bail out the company for the second time in nine months, four executives familiar with the plan said.

Mitsubishi Motors plans to sell at least 200 billion yen of preferred shares and subordinated bonds to three Mitsubishi companies, said the executives, who declined to be named. Another 50 billion yen would come from state-owned Development Bank of Japan and the rest from units of Mitsubishi Tokyo Financial Inc. that would provide credit and swap debt for equity.

"We are not optimistic about Mitsubishi Motors' future,'' said Fumiyuki Nakanishi, a Tokyo-based equity strategist at SMBC Friend Securities Co., which doesn't disclose its holdings. "It's clear the company's financial condition is still severe.''

Japan's only unprofitable carmaker, which received a 496 billion yen rescue package from stakeholders in May, needs more money to pay debts that totaled 1.14 trillion yen at the end of last year. The Tokyo-based producer of Colt compact cars and Pajero sport-utility vehicles also needs to develop new models after selling fewer of its vehicles in Japan every month throughout 2004.

Mitsubishi Motors is in talks with DaimlerChrysler AG to compensate the German automaker for damages related to recall scandals at the Japanese automaker's truck unit, the company said Friday.

The talks on possible compensation are continuing although Mitsubishi Motors has not received an official demand for restitution from DaimlerChrysler, the Japanese automaker said in a statement.

DaimlerChrysler is miffed that scandals about a systematic cover-up of auto defects emerged after it took a stake in both Mitsubishi Motors and its truck unit. The scandals have recurred despite promises by Mitsubishi Motors to come clean after the wrongdoing was first disclosed in 2000.