TOKYO - Before DaimlerChrysler AG entered the picture, Mitsubishi Motors Corp. planned to spin off its truck operations into a company to be owned 19.9 percent by Sweden's AB Volvo. Although that deal is dead, analysts say a spinoff still is possible - but not soon.
It's likely to be "a two-stage process," said Howard Smith, auto analyst at ING Baring Securities (Japan) Ltd. in Tokyo.
"Trucks need to be on Eckrodt's radar screen more than they have been," he said, referring to Mitsubishi's CEO-elect, Rolf Eckrodt.
"In the short term, that means parts sharing and coordination. But further out, once he's packaged it in a way he wants, then I see him spinning it off in the hands of a manager he chooses," he said.
Smith said it was "reasonable to argue" that Mitsubishi's truck business would be worth between ¥130 billion and ¥150 billion, or $1 billion to $1.15 billion at current exchange rates. If DaimlerChrysler purchased 35 percent of a truck-business spinoff, that would inject $350 million to $405 million into Mitsubishi.
And Mitsubishi could sell half of its remaining stake, raising another $310 million to $385 million. The money could be used to pay some of Mitsubishi's staggering automotive debt of about $7.7 billion.
The revenues from a spinoff, therefore, would not be a lot in terms of Mitsubishi's huge debt load, but it could be appealing to a company that has relatively few other assets to sell.