2ND LD: Trading houses Mitsubishi, Itochu to buy stake in Isuzu.TOKYO, Nov. 18 Kyodo (EDS (Electronic Data Systems, Plano, TX, www.eds.com) Founded in 1962 by H. Ross Perot (independent candidate for the President of the U.S. in 1992), EDS is the largest outsourcing and data processing services organization in the country. : UPDATING WITH ANNOUNCEMENT) Trading houses Mitsubishi Corp. and Itochu Corp. announced Thursday they will take a capital stake in Isuzu Motors Ltd. by acquiring preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. of the second-largest truck maker in Japan. Mitsubishi said it will purchase 11.75 million preferred shares worth about 9.4 billion yen at face value while Itochu said it will acquire about 8.23 million preferred shares with a face value of some 6.6 billion yen. Purchased amounts are estimated at some 27 billion yen and 20 billion yen respectively. The trading houses said they made the decision on a request from Isuzu, which asked them to help stabilize its management. Mitsubishi said it believes Isuzu's management stability is important for the trading house as it is cooperating with the automaker to build pickup trucks in Thailand. Itochu said it aims to further boost overseas sales, mainly in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and China, by reinforcing its ties with Isuzu. Itochu currently has a 2 percent equity stake in the automaker. For Isuzu, the investment will likely help reinforce its financial standing and credit capacity. The preferred shares the trading houses will buy were allocated by Isuzu to its main creditor banks, including Mizuho Financial Group Mizuho Financial Group, Inc. (株式会社みずほフィナンシャルグループ Inc. and Mitsubishi Tokyo Financial Group Inc. in 2002 in a debt-to-equity swap deal to rebuild the automaker's business. The two trading houses will buy a part of such shares from those lenders. The preferred shares can be converted into common shares from October 2006. If Mitsubishi converts all the preferred shares it buys into common shares, its stake in the automaker will be about 11 percent, making it the largest stockholder ahead of General Motors Corp., which has a 10.3 percent stake. The trading houses said they have not decided on the timing and ways to convert the preferred shares. |
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