TOKYO -- Scandal-hit Mitsubishi Motors, with Carlos Ghosn set to take the position of chairman, faces a bumpy journey to recovery in an increasingly competitive landscape.

Nissan Motor, which Ghosn oversees as CEO, is slated to take a 34% stake in Mitsubishi Motors as early as this month. Ahead of this, Mitsubishi Motors on Wednesday slashed its fiscal 2016 earnings forecast to clean up some negative legacies.

Mitsubishi Motors Chairman and President Osamu Masuko has been asked by Nissan to stay on as president. He told reporters that the request came from Ghosn, and that the matter will be discussed again Thursday.

The stock market cheered the news of Ghosn's chairmanship, sending Mitsubishi Motors shares surging as much as 11% to 536 yen, the highest since June 24.

Nissan will send four of its 11 directors, including Ghosn, to Mitsubishi Motors under the planned partnership. Overhaul of corporate culture and rebuilding of trust are the central challenges for Mitsubishi Motors. And who will take the lead in that effort had been a focal point for many.

In the earnings downgrade announced Wednesday, Mitsubishi Motors reflected new extraordinary losses over uncertainty in several factors. Those include emerging market performance; revision of foreign exchange rate assumptions; additional costs of quality measures; and impairment of its Mizushima plant in Okayama Prefecture, production site of the minicars involved in the scandal.

"We will have big losses this fiscal year, but hope to book what we can to aim for a V-shaped recovery through the tie-up with Nissan," says Executive Vice President Koji Ikeya.

Another revelation Wednesday was that Mitsubishi Motors is inquiring with multiple banks about new loans of 80 billion yen ($773 million) or so. Among the potential lenders are megabanks including the Bank of Tokyo-Mitsubishi UFJ. A loan is seen as being granted as soon as next month.

Mitsubishi Motors has abundant cash, so its cash flows will not stall even after the revised earnings guidance. But the company is apparently getting an extra cushion with this loan to stabilize finances.

The company aims to reap synergies with Nissan in next-generation technologies and emerging-market strategy. But the competition is fierce, with Toyota Motor and Suzuki Motor joining hands, and foreign rivals collaborating too.

Mitsushige Akino, an executive officer of Ichiyoshi Asset Management, says it's unclear how deeply Nissan will get involved in Mitsubishi Motors operations and whether earnings will pick up.

The Mitsubishi brand has waned significantly, especially after the company was found in September to have cheated again in fuel-economy retesting following the scandal. Turning it around ill put Ghosn's prowess to the test.

(Nikkei)