Source disclosure: January 28, 2026
Mitsubishi Corporation [8058.T]
TOKYO, Jan 28 (Pulse News Wire) -- Mitsubishi Corporation (8058.T), led by Chairman and CEO Katsuyuki Nakano, announced today that it has decided to aim for early redemption of A-type preferred shares held by its subsidiary Chiyoda Chemical Construction Co., Ltd. (Chiyoda Chemical). The company also resolved to freeze conversion rights from A-type preferred shares to ordinary shares until June 30, 2029. These decisions will take effect pending approval at Chiyoda Chemical's 98th regular shareholders' meeting scheduled for June this year under international accounting standards (IFRS).
Under IFRS, Mitsubishi currently accounts for Chiyoda Chemical as a consolidated subsidiary due to holding all convertible preferred shares, which would give it an 82.1% voting stake. However, should these changes be approved, Chiyoda Chemical will become an equity-method affiliate, leading to its exclusion from Mitsubishi’s list of subsidiaries. Additionally, Chiyoda Exwon Engineering, a subsidiary of Chiyoda Chemical, and CHIYODA INTERNATIONAL, a U.S.-based entity, will also be excluded from Mitsubishi's subsidiary roster.
Chiyoda Chemical, established on January 20, 1948, is headquartered in Minato Mirai 4-chome, Nishi Ward, Yokohama City, Kanagawa Prefecture. It operates comprehensive engineering services including consulting, planning, design, procurement, construction, trial operation, and maintenance related to plants. With a capital of 150 billion yen, Chiyoda Chemical is majorly owned by Mitsubishi Corporation with a 33.46% shareholding ratio. The company employs one representative director concurrently serving as a Mitsubishi Corporation executive and hosts multiple dispatched personnel from the parent firm. Significant business dealings exist between Mitsubishi Corporation and Chiyoda Chemical primarily in industrial plant and infrastructure sectors.
The timeline for these changes includes the decision date set for January 28, 2026, and the execution date planned for late June 2026. Regarding future prospects, Mitsubishi anticipates minimal impact on its fiscal year 2025 performance but plans to reassess the effects on fiscal year 2026 results.
This move follows a strategic agreement aimed at accelerating Chiyoda Chemical's self-reliance and promoting its transformation towards sustainable growth. In May 2019, Mitsubishi committed approximately 1.6 trillion yen ($13.6 billion) to support Chiyoda Chemical's restructuring efforts through preferred stock subscriptions and senior loan facilities. This investment helped stabilize Chiyoda Chemical's operations without any losses incurred during contracted projects within the support period. Furthermore, Chiyoda Chemical's mid-term business plan released in May 2025 signaled a shift away from high-risk EPC projects overseas, aligning with Mitsubishi's vision for long-term stability.
As part of this agreement, Mitsubishi will fix the repayment amount of the preferred shares at 763 billion yen, combined with unpaid dividends totaling around 105 billion yen up to March 2026 and subsequent dividend payments at an annual rate of 3%. Repayment will occur over three years starting from April 2026. Simultaneously, the senior loan facility, previously increased to 100 billion yen in 2024, will terminate upon implementation of the preferred share conditions change. The new terms stipulate a fixed repayment schedule with adjusted interest rates and conversion options, ensuring a smoother transition for both parties involved.