Mitsubishi Aircraft Corporation (Nagoya Chubu), the subsidiary of Mitsubishi Heavy Industries that put its SpaceJet M90 (nee MRJ) project indefinitely on hold last October, has slashed its capital by 99.6% to help stem the beleaguered regional jet programme’s cumulative losses.

The manufacturer revealed on April 29 that it had reduced its capital from JPY135 billion yen (USD1.23 billion) to JPY500 million (USD4.57 million) in March. Its capital reserves of an additional JPY135 billion were also eliminated.

While its parent holds the largest stake in Mitsubishi Aircraft Corporation, of 64%, Toyota Motor Corporation and Mitsubishi Corporation each owns 10% of the shares, and other shareholders include Sumitomo Corporation and Mitsui & Co. It employed around 1,500 people as of the start of May, local media reported.

According to Nikkei Asia, the aircraft unit’s liabilities were already exceeding assets by JPY464.6 billion (USD4.25 billion) by the end of the previous financial year in March 2020, and accumulated losses are likely to have grown since the SpaceJet project was frozen.

Mitsubishi Aircraft Corporation blamed the halt on the impact of coronavirus pandemic on the global airline industry, but the programme, which originally aimed to deliver its first aircraft in 2013, suffered numerous delays. Many accused the company of a reluctance to draw on foreign expertise to help it negotiate the project’s complexity, Nikkei Asia reported.

In November 2020, it closed its flight test centre in the United States at Moses Lake, and in January 2021, US lessor Aerolease Aviation became the first to cancel an order, which it had signed in 2016, for ten firm orders and ten options for the Mitsubishi Regional Jet.