TOKYO -- Akebono Brake Industry is on track for a net loss of roughly 10 billion yen ($91.1 million) covering the fiscal year ending in March, plunging into the red for the first time in three years due to impairment losses at its troubled U.S. business.
The Toyota Motor-affiliated brake maker previously projected a 2 billion yen profit for the year. But shrinking earnings overseas pushed it to book impairments totaling 15 billion yen, not just in the U.S. but in Slovakia and Thailand as well. The company plans to offset some of the blow by raising about 4 billion yen through share sales.
Akebono Brake has struggled to regain momentum since booking net losses for fiscal 2014 and fiscal 2015, a result of higher labor costs due to a surge in U.S. orders. The turmoil cost the company contracts on newer models by key clients like General Motors.
Amid financial setbacks, Akebono Brake filed for an out-of-court turnaround process at the end of January. It also seeks a moratorium on debt repayments. The Japanese company will present an outline of its rehabilitation plan to creditors at a meeting in Tokyo on Tuesday.