Moody’s Investors Service confirmed the Ba1 long-term rating of Mitsubishi Motors Corp. following the announcement that the automaker and DaimlerChrysler AG will proceed with their strategic alliance and that the German-U.S. auto giant will increase its influence in MMC.
The outlook for the rating remains stable, Moody’s said.
“These rating actions reflect Moody’s expectation that Mitsubishi’s alliance with (DaimlerChrysler) will enhance the company’s ability to reduce debt, strengthen its competitive position, and improve its operating efficiencies,” Moody’s said.
“This alliance should also help the company achieve the operational and financial objectives that are part of its Heart-Beat 21 restructuring initiative,” the credit rating agency added.
The new agreement between MMC and DaimlerChrysler will make Mitsubishi Group’s ownership of MMC fall from 51.6 percent to 34 percent.
“The relationship with Mitsubishi Group has been an important source of capital and financial flexibility for Mitsubishi Motors, and will remain a key rating factor,” Moody’s said.
Ba1 is the 11th highest of Moody’s 21 ratings.
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