Misawa Homes Holdings Inc. announced Thursday that a team led by Toyota Motor Corp. has agreed to inject 25.8 billion yen in fresh capital into the troubled home builder.
Toyota said it hopes to strengthen its own home-building business through a capital and operational tieup with Misawa.
Under the terms of the deal, Misawa will issue new shares to Toyota and its partners, Nomura Principal Finance Co. and Aioi Insurance Co., to give the group a combined 33.4 percent stake, which is the minimum for veto power.
Toyota will buy 10.4 billion yen worth of shares to become the second-largest shareholder in Misawa, with a 13.4 percent stake. It plans to send three of its senior officials to Misawa.
While Nomura Principal will be the largest shareholder, with a 14.4 percent stake, "Toyota will take a leadership role among sponsoring partners," said Mitsuo Kinoshita, senior managing officer of Toyota. He heads the firm's housing business.
After a long struggle, Toyota's housing business has seen solid growth in recent years, Kinoshita said, adding that it sold just over 4,300 houses in fiscal 2004.
Still, the company is far from enjoying the same status it boasts in the auto business.
"Misawa has strong product development, sales capabilities and brand power," Kinoshita said.
The Industrial Revitalization Corp. of Japan decided in late December to help debt-ridden Misawa, one of UFJ Bank's largest problem borrowers.