Mitsubishi plans $1.4B rescue for plant engineering firm
Japanese trading house Mitsubishi Corp and MUFG Bank plan to rescue plant engineering company Chiyoda Corp with a $1.4 billion lifeline, betting on a turnaround fueled by greater LNG demand, the Nikkei newspaper reported.
Chiyoda, one of the world’s leading builders of liquefied natural gas (LNG) plants, has struggled with losses after a hurricane hit its Cameron LNG project in 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 percent 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 percent stake in the engineering company, will provide the bulk of the 150 billion yen ($1.36 billion) 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.
$1 = 110.4900 yen Reporting by Ritsuko Ando, Editing by Sherry Jacob-Phillips
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