Shares in Japan's Mazda Motor tumbled more than 14 percent on Tuesday after reports that the troubled car maker plans to raise 100 billion yen ($1.25 billion) in a new share issue.
Mazda Motor is to raise the cash as it comes under pressure from the strong yen and slow global demand, according to a report by national television network NHK, which did not cite its sources.
The car company will also take out subordinated loans totalling 70 billion yen from various banks. The loans come with higher interest rates but are payable only after satisfying other debts.
The report comes weeks after Mazda Motor said it expects to lose 100 billion yen in the year to March, a fourth straight annual loss.
In afternoon trade the firm was down 14.28 percent at 138 yen.
With the added capital Mazda, Japan's fifth-largest automaker by volume, aims to build factories and boost its presence in foreign markets, particularly emerging economies such as Mexico, NHK said.
A company spokesman declined to immediately comment on the report.
Japanese automakers have come under pressure from the soaring yen, which last year hit record highs against the dollar, making exports relatively more expensive overseas and cutting the value of repatriated earnings.
The trend has encouraged many manufacturers to move factories overseas.
Mazda, along with its domestic rivals, has also seen global sales slip due to slower demand from Europe, which is battling a long-running debt crisis.
In addition, severe flooding in Thailand last year disrupted its global supply chain just as it was recovering from Japan's earthquake and tsunami in March.
