NAGOYA, Japan -- The company behind the Mitsubishi SpaceJet reduced its capital by more than 99% last month to help cover losses stemming from its now-frozen plan to build Japan's first jetliner.
Mitsubishi Aircraft, a unit of Mitsubishi Heavy Industries, cut its capital to 500 million yen ($4.6 million) from 135 billion yen. Capital reserves were eliminated. Capital and capital reserves had previously totaled 270 billion yen.
While its parent holds the largest stake, other shareholders include Toyota Motor and Mitsubishi Corp. The aircraft unit's liabilities exceeded assets by 464.6 billion yen as of March 2020, but accumulated losses have likely grown since the SpaceJet project was halted.
Established in 2008, Mitsubishi Aircraft launched the program in a bid to bring Japan's first homegrown passenger jet to market.
But the company's reluctance to draw upon foreign expertise resulted in it being overwhelmed by the complexity of the project and became bogged down in delays. It had initially aimed to hand over its first jet in 2013, but delivery was postponed six times.
With the coronavirus pandemic slamming the global airline industry, the company announced in October that it would freeze the project. In November, it closed its flight testing center in the U.S. state of Washington. An American aircraft leasing firm canceled an order for 20 planes in January, becoming the first to do so.