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Egypt sales firm sues Mitsubishi Motors for $900 mn

Egypt sales firm sues Mitsubishi Motors for $900 mn
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First Published: Mon, Apr 19 2010. 12 41 PM IST
Updated: Mon, Apr 19 2010. 12 41 PM IST
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% to ¥13.8 billion ($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 31 March by 6%, to ¥4.7 billion, 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% 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.
Shares in Mitsubishi Motors ended down 1.5% in a weak Tokyo market before the news. The company is due to announce its annual results on 27 April.
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First Published: Mon, Apr 19 2010. 12 41 PM IST