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Egypt sales firm sues Mitsubishi Motors for $900 mln - Daily News Egypt

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Egypt sales firm sues Mitsubishi Motors for $900 mln

TOKYO: Japan s Mitsubishi Motors Corp said on Monday an Egyptian sales firm is suing it for $900 million in damages, complaining it unfairly ended a distribution contract. Separately, the Japanese automaker slashed its estimate of annual operating profit by 54 percent to 13.8 billion yen ($149.7 million) citing a drop in vehicle sales and …


TOKYO: Japan s Mitsubishi Motors Corp said on Monday an Egyptian sales firm is suing it for $900 million in damages, complaining it unfairly ended a distribution contract.

Separately, the Japanese automaker slashed its estimate of annual operating profit by 54 percent to 13.8 billion yen ($149.7 million) citing a drop in vehicle sales and the failure to fully meet its planned cost reductions.

A spokesman said Mitsubishi Motors expected no impact from the lawsuit.

The maker of the Pajero SUV lowered its net profit estimate for the year ended March 31 by 6 percent, to 4.7 billion yen, shored up by the yen s recent weakening.

In a suit filed in an Egyptian court, sales firm Masria Co said Mitsubishi s termination notice lacked reasonable grounds and demanded an extension of the contract or damages of $900 million, equivalent to 56 percent of Mitsubishi Motors net assets, the automaker said.

Mitsubishi, Japan s sixth-largest automaker, said it served a termination notice on Masria six months before the contract was due to expire, in accordance with agreed provisions.

Mitsubishi Motors will strenuously fight this lawsuit, it said in a statement.

It added that it did not expect the lawsuit to affect its business results.

Mitsubishi said it revised down the forecasts due to factors such as a drop in sales volume as well as the company being unable to realize some of its planned cost reductions.

It also lowered its net profit forecast to 4.7 billion yen from 5 billion and revenue to 1.44 trillion yen to 1.5 trillion.

For the nine months to December, Mitsubishi announced a net loss of 25.7 billion yen, hit by the economic downturn and a stronger yen.

Mitsubishi Motors will publish its final annual results on April 27. In 2008-2009, it had suffered a net loss of 54.88 billion yen. -Agencies

Topics: FJP

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https://www.dailynewsegypt.com/2010/04/19/egypt-sales-firm-sues-mitsubishi-motors-for-900-mln/
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