(Edits)
By Chang-Ran Kim, Asia auto correspondent
TOKYO, March 31 (Reuters) - Hard-pressed Japanese auto maker Mitsubishi Motors Corp denied a newspaper report on Wednesday that it would stop building cars in the United States, but repeated that pulling out of Australia remained an option.
The Nikkan Kogyo Shimbun business daily reported that Japan's No.4 car maker, owned 37 percent by DaimlerChrysler AG , planned to halt production of Mitsubishi-brand cars at its Normal, Illinois plant, its sole U.S. production site.
After a planned capital injection by the Chrysler division of DaimlerChrysler into Mitsubishi's U.S. unit, the Illinois plant would produce only Chrysler-brand vehicles, the paper said without identifying its sources.
"The report is wrong. We want to give a clear statement that there are no such plans," Mitsubishi Motors senior spokesman Jochen Legewie said.
"North America will continue to be a very important region for our profits," he said. "But (production in) Australia is something we will look at in the long run."
Reeling under losses resulting from loan control problems at its North American finance unit, Mitsubishi is expected to unveil major restructuring measures, including a massive capital increase, on April 30.
Under the programme, Mitsubishi is expected to tap DaimlerChrysler and other big shareholders such as Bank of Tokyo-Mitsubishi and Mitsubishi Heavy Industries for a bail-out.
After earlier reports that the aid could total 300 billion yen ($2.84 billion), the Yomiuri Shimbun daily reported on Wednesday that Bank of Tokyo-Mitsubishi, the auto maker's main creditor, had asked the state-owned Development Bank of Japan to lend up to 100 billion yen to Mitsubishi Motors.
The amount of money required for the rehabilitation may total more than 400 billion yen, the paper said, as costs to cover the consolidation of plants and other restructuring measures balloon.
Mitsubishi Motors declined to comment on that report, saying plans had not been finalised.
Bank of Tokyo-Mitsubishi also declined comment.
But an industry source said current negotiations between Mitsubishi Motors and its shareholders were focused on how to enhance the auto maker's capital base.
MITSUBISHI SAYS EXECUTIVES TO STAY
Hurt by a plunge in U.S. sales, Mitsubishi Motors last month jacked up its net loss forecast to 72 billion yen from 11 billion for the business year that ended on Wednesday.
The revision fanned rumours that Chief Executive Rolf Eckrodt would be forced to resign.
Citing unnamed sources close to the matter, leading Japanese business daily Nihon Keizai Shimbun reported on Wednesday that Mitsubishi Motors was considering asking its top five executives to step down around late June because it believed this would improve its chances of obtaining financial support.
Mitsubishi's Legewie denied that the executives would be asked to resign. "It's not even speculation; it's absolutely wrong," he said.
The paper said executive vice presidents Steven Torok, Ulrich Walker, Eiji Iwakuni and Keiichiro Hashimoto would be asked to resign, along with Eckrodt.
Dogged by shrinking demand in Australia, Eckrodt raised the possibility this month that Mitsubishi might have to close its operations there unless sales turned up, despite having announced plans last July to pour over A$230 million ($174 million) into a new R&D centre in Adelaide.
Mitsubishi, the smallest of Australia's four car makers, has a plant in the state of South Australia that employs about 3,200, but has been hit by declining sales.
Mitsubishi's Australian sales fell 20 percent in the first two months of 2004 against a rise of 10 percent for the total market.
Shares in Mitsubishi Motors ended down 0.75 percent at 263 yen, while the main Nikkei average rose 0.19 percent. ($1=105.81 yen) ($1=1.326 Australian dollar) (Additional reporting by Chikako Mogi and Yuko Inoue)