TOKYO (Reuters) – Japanese trading house Mitsubishi Corp and MUFG Bank plan to rescue plant engineering company Chiyoda Corp with a $1.4 billion lifeline, betting on a turnaround fueled by greater LNG demand, the newspaper reported on Monday.
Chiyoda, one of the world’s leading builders of liquefied (LNG) plants, has struggled with losses after a hurricane hit its Cameron LNG project in Louisiana.
However, a global shift from coal is seen boosting the demand for natural gas, and Royal Dutch Shell (LON:) has forecast the global LNG trade to rise 11 percent to 354 million tonnes this year. Mitsubishi has said it expects such growth to also fuel a rise in LNG projects.
Mitsubishi, which has bailed out Chiyoda twice already and has a 33.4 percent stake in the engineering company, will provide the bulk of the 150 billion yen ($1.36 billion) lifeline through a private placement of new preferred shares and loans, the report said, without citing sources.
MUFG Bank, a part of Mitsubishi UFJ Financial Group, will provide additional financing, it said.
Chiyoda said it was in talks, but no decision had yet been made. It also said its full-year loss would likely be bigger than it previously forecast.
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