S&P might up Mitsubishi Motors

Standard & Poor's said it placed its B+ long-term corporate credit rating on Mitsubishi Motors Corp. on CreditWatch with positive implications.

The CreditWatch placement reflects the agency's opinion that the company's plan to restructure its capital could significantly improve its financial risk profile.

The capital restructuring plan announced Nov. 6 includes retiring Mitsubishi Motors' outstanding preferred shares, which have been a major impediment to a resumption of paying cash dividends on common shares.

Mitsubishi Motors plans to retire all of its outstanding preferred shares, which came to about ¥380 billion as of Nov. 6, and replace them with the issuance of a maximum ¥210 billion in new common shares, repurchase of some preferred shares from shareholders at a discount and conversion of remaining preferred shares to common shares with the agreement of shareholders.

If realized, this capital restructuring plan could improve the company's financial risk profile more than S&P factored into its base-case scenario for the current rating, the agency said.

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