Could Mitsubishi hold the key to Seeing Machines’ refinancing?

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As Seeing Machines approaches its November 26 AGM, shareholders are becoming increasingly concerned about the lack of a longer-term refinancing agreement with Magna International.

The existing convertible loan notes, with an original principal of US$47.5m, were due to mature on October 4. An interim extension has bought the company until November 30 to negotiate a longer-term arrangement. But the clock is ticking, and the share price has come under pressure as investors wait for news.

Magna is clearly in a strong negotiating position. But there is another player whose interests could prove significant: Mitsubishi Electric Mobility Corporation, the wholly-owned automotive subsidiary of Mitsubishi Electric Corporation, which owns 19.9% of Seeing Machines.

Mitsubishi Electric Mobility invested £26.2m in Seeing Machines in December 2024, initially through a subscription for new shares at 4.09p, and subsequently increased its holding to 19.9% through purchases from existing shareholders.

This was not simply a financial investment. The two companies agreed to collaborate on automotive opportunities, including accelerating the adoption of Seeing Machines’ driver and occupant monitoring technology among Japanese manufacturers. Their relationship has since extended into commercial opportunities for Guardian, Seeing Machines’ fleet-monitoring product, as well as robotics.

The size of the investment makes Mitsubishi Electric Mobility a significant shareholder, with an obvious interest in the company’s long-term prospects. It also gives it a potentially important perspective on any refinancing deal that could substantially dilute existing shareholders.

The dilution question

One possible outcome of the negotiations with Magna could involve some or all of the outstanding debt being converted into equity at a revised price.

The potential dilution is considerable. The original US$47.5m principal, together with accrued interest, means the amount owed could be materially higher. If the total liability were around US$63m, and converted at an illustrative price of 2.9p, it would require the issue of approximately 1.65bn new shares, based on an assumed exchange rate.

That would represent dilution of roughly 25% for existing shareholders. Mitsubishi Electric Mobility’s holding would fall from 19.9% to around 14.9%, assuming it did not participate in the issue.

There is an important qualification: the existing convertible notes have a contractual limit of 386.4m shares that can be issued on conversion. A conversion on the scale illustrated above would therefore require a renegotiation of that provision or a different financing structure. This calculation is intended to show the potential scale of dilution, not to suggest that such a conversion is currently proposed.

Would Mitsubishi Electric Mobility be comfortable with a deal that significantly diluted its shareholding? It might be prepared to accept some dilution if the alternative were to leave Seeing Machines financially constrained, but it would presumably want to protect the strategic value of its investment.

There is no public evidence that Mitsubishi Electric Mobility has a veto over the refinancing, or that it is directly involved in the discussions with Magna. Its 19.9% holding does not, by itself, establish either. Nevertheless, its presence adds another important shareholder interest to the equation.

Could a compromise be emerging?

One possible solution would be for Magna to agree to a longer extension of the existing notes, but on revised financial terms that provide it with a better return.

That might involve a higher interest rate, a more favourable conversion price for Magna or additional equity incentives, while retaining a limit on the number of shares Magna could acquire. Such an arrangement could give Seeing Machines more time to benefit from its growing automotive royalties and emerging opportunities in robotics, without imposing the full burden of an immediate repayment or a heavily dilutive conversion.

It could also suit Magna. Moreover, Magna isn’t negotiating in a vacuum. The company has a financial interest in recovering its loan, but it also has a commercial relationship with Seeing Machines. Its technology is incorporated into a mirror-based driver and occupant monitoring system supplied by Magna to a major German car manufacturer, Volkswagen. Preserving that relationship and the supply programme is an additional consideration, quite apart from the value of the loan itself.

For Mitsubishi Electric Mobility, a solution that gives Seeing Machines the financial headroom to pursue its automotive growth and develop new markets would help protect the strategic value of its shareholding.

This is, of course, only one possible scenario. There is no indication that such a compromise is being negotiated, nor that Mitsubishi Electric Mobility has been asked to support it. But it illustrates why the interests of the three companies may not be as far apart as the current uncertainty suggests.

Seeing Machines has said it is confident its FY2026 audited results will be published before the AGM on November 26. Investors are hoping that, prior to that, the company will provide clarity on the longer-term financing arrangements.

The writer holds stock in Seeing Machines.

Seeing Machines ‘confident’ audited results will precede AGM, as Magna refinancing talks continue

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In response to my questions, Seeing Machines has confirmed that it is “confident” its FY2026 Audited Results will be available before the AGM, scheduled for 26 November 2026.

A spokesperson for Seeing Machines also stated: “They have been delayed due to continuing work on the longer-term extension and refinancing options for the existing Convertible Loan Notes with Magna International Inc.

Investors will be updated as soon as they are available.”

The company’s reassurance that the audited results will be published before the AGM is encouraging. It remains to be seen, however, whether the longer-term refinancing agreement will also be concluded by then. Given the connection between the delayed results and negotiations with Magna, investors will understandably be hoping for clarity on both fronts.

Against this backdrop, today’s share-price fall seems disproportionate to the automotive KPIs themselves, although refinancing uncertainty remains an obvious concern for investors.

The latest KPIs for the Q1 2027 financial year were encouraging, with automotive production approaching 2m units and the number of cars on the road equipped with Seeing Machines’ technology exceeding 10.2m.

In a note published today, Peter McNally, analyst at house broker Stifel, commented:

“Automotive production grew +285% y/y to 1.96m units (Q1 FY26: 0.51m). While this is -7% q/q from the record Q4 FY26 (2.11m), this is due to European new car sales falling c.15% q/q, in line with expected seasonality and therefore shows progress”.

He also drew attention to the fact that: “Cars on the road carrying SEE’s DMS are subsequently up +140% y/y to 10.2m (Q1 FY26: 4.24m).”

Guardian hardware sales were disappointing compared with the previous quarter, although they were up 188% year-on-year. Management needs to explain more clearly how its revised sales strategy is expected to address this weakness and deliver sustained growth.

Perhaps the sales-agent agreement signed with Mitsubishi Electric Automotive America will help generate stronger sales than the earlier Referral Agreement signed in 2025.

The more important question is whether the new arrangement can translate into sustained growth. I’d like to see more granular details from management on the expected contribution from Mitsubishi, the timetable for improved sales and whether the company has revised its Guardian revenue expectations.

I’d also like to know how the move to integrate Seeing Machines’ DMS directly into the ADAS systems of trucks via Tier 1 suppliers is progressing.

Still, as McNally points out: “Guardian ARR grew +13% y/y (+2% q/q) to $15.3m (Q4 FY26: $15.0m), demonstrating the importance of the recurring base while volumes are low”.

Once the refinancing arrangements are clarified and the audited results published, investors should have a much better idea of whether Seeing Machines’ operational progress is translating into sustainable financial performance and shareholder value.

I remain optimistic about the company’s long-term prospects, although the refinancing terms will be crucial.

The writer holds stock in Seeing Machines.

Questions for Seeing Machines AGM

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The bursting of the dot-com bubble in 2000 didn’t mark the end of the internet. It marked the beginning of its commercial maturation. The same is probably true of AI, notably physical AI in the form of robotics.

The rise of the robots is unstoppable; the question is which companies will provide the technology that makes them ubiquitous.

My conviction is that Seeing Machines will be one of them. Still, management first has to get its act together regarding the refinance.

At the AGM on 26 November I’d like to ask management:

  1. Why the refinancing arrangements proved so difficult to conclude, given the importance of the facility to the company’s financial position? With hindsight, were there things that could have been handled differently, and what lessons have been learned to ensure shareholders aren’t exposed to similar uncertainty in future?
  2. Given that Seeing Machines’ Physical AI Platform is designed to be hardware-agnostic, how are discussions progressing with major semiconductor and computing platform providers, such as NVIDIA and Qualcomm, about licensing or integrating SEE’s human-perception technology into their robotics ecosystems?

The author holds stock in Seeing Machines.

My Mea Culpa at the Hands of Seeing Machines

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It’s ironic that someone who prides himself on being fairly hard-headed should have made the mistake of failing to follow this advice from Benjamin Graham, arguably the greatest investor of all time.

All I can say in my own defence is that my faith in the technology of Seeing Machines has, at times, blinded me to the lack of tangible returns as a shareholder in this company. It has been a costly lesson for me, as for others.

I still believe that Seeing Machines will be taken over because of the quality of its technology. However, it is clear that successive management has not given sufficient priority to protecting shareholder value.

Even a takeover may not compensate for the opportunity cost of this mistake. It is a sobering reminder that being right about a company’s technology is not necessarily the same as being right about the investment.

I’m not about to sell out of Seeing Machines while I believe my original investment thesis remains intact. However, management must ultimately be judged on what it delivers for shareholders over the coming months.

The writer holds stock in Seeing Machines.

Colin Barnden: a guiding light

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I learnt this morning of the sad news that Colin Barnden had passed away. I thought it only right to acknowledge my debt to the quality of his Independent analysis and his research into the area of DMS in automotive. 

He was the expert in this area. Many financial analysts would acknowledge that, I’m sure. Even he once joked that his knowledge was “Inch wide and mile deep” in this area.

I myself went to him for information/analysis many times – indeed, on occasion in the past he wrote pieces on Safestocks. 

I can’t claim to have know him other than in a professional capacity as a technology analyst but his intelligence and honesty shone out every time I heard him speak or read an article he’d written. 

He himself wrote this on Safestocks back in 2019 and it’s typically honest and forthright: “My role is to make an argument but it is up to everyone to make their own individual decisions about how they think things will play out. No one has a crystal ball.”

For my part, I think he was clearly proven correct about DMS and its importance in the auto industry, and much else besides. 

He’ll be sorely missed by me and many others for the insights he regularly delivered. But that loss pales into insignificance when you consider what his untimely death means for his family.

Seeing Machines moves into robotics and Physical AI with NVIDIA

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Seeing Machines is no longer merely exploring robotics. It has built a platform designed to become the human-perception layer inside the Physical AI ecosystem.

That may sound like a bold claim for a company best known for monitoring drivers, but Seeing Machines’ latest robotics demonstration suggests the strategy is now tangible.

The company has published a technical paper demonstrating its Human Mesh Recovery technology running on NVIDIA’s Jetson Thor robotics platform. HMR can reconstruct a detailed 3D representation of a person from a single camera, allowing a machine to understand human position, posture and movement in real time. On Jetson Thor, Seeing Machines says it can deliver up to 180 frames per second while combining high accuracy with a relatively compact model.

The significance is not simply that SEE appears to match the performance of much larger models such as Meta’s SAM 3D Body. It is that SEE is achieving this level of human understanding with a much smaller, faster model designed to run directly on the embedded hardware inside a robot.

A robot operating in a factory, warehouse, hospital or home cannot simply know that a human is nearby. It needs to understand where that person is, what they are doing and, ultimately, what they are likely to do next in real time. Seeing Machines’ new Physical AI platform is designed around precisely this problem, with capabilities spanning human detection, pose and movement estimation, behavioural understanding, prediction and support for safe interaction.

And this is no longer just a research project. Seeing Machines launched its Human-Centred Physical AI Platform in August, has demonstrated its technology on a Unitree G1 humanoid robot and is recruiting robotics engineers with experience in physical robots, perception, control, motion planning and human-robot interaction.

That points towards an important change in the investment story.

Seeing Machines does not need to become a robot manufacturer. Its opportunity may be considerably more valuable: becoming the human-perception layer that sits inside robots made by other companies.

The company’s platform is designed to work across multiple robot embodiments and hardware configurations. That opens the possibility of SEE supplying the intelligence that allows different types of robots to understand and interact with humans.

For a company that has spent more than two decades teaching machines to understand humans, this is a logical extension of its existing expertise rather than a completely new direction.

And it makes Seeing Machines increasingly interesting to another group of potential partners: chip companies competing for market share in Physical AI.

If you’re NVIDIA, Ambarella or another edge-AI processor company trying to get your silicon into the next generation of robots, an efficient human-perception model that makes your processor demonstrably useful for Physical AI is a very valuable piece of the ecosystem.

That makes SEE not merely a potential robotics supplier, but a human-perception platform that chip companies will want inside their Physical AI ecosystems.

The writer holds stock in Seeing Machines.

What does Magna want from Seeing Machines?

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Seeing Machines’ decision to extend its convertible loan notes with Magna raises an intriguing question: how much does Magna actually want to nurture the relationship?

Magna is vastly larger than Seeing Machines, so it would be wrong to suggest that SEE’s debt is financially important to the group. But the relationship goes beyond lending money.

Magna originally provided Seeing Machines with up to US$47.5m of convertible financing while also entering into a strategic collaboration around integrating SEE’s driver and occupant monitoring technology into vehicles. Magna therefore has both a financial and potentially strategic interest in SEE’s success.

That relationship may now be becoming more valuable.

SEE’s automotive royalty revenues increased 135% to $33.9m in FY2026, while the number of vehicles produced under its programmes reached 4.5m, including 2.1m in the final quarter. The business is generating substantially more royalty income than when Magna originally invested.

So what might Magna offer?

Rather than simply demanding repayment or allowing an external lender to take over, Magna has agreed to extend the existing notes. It could potentially do so on revised terms, allowing SEE to repay from its growing royalty cash flows while preserving Magna’s conversion rights and strategic relationship.

We shouldn’t assume Magna will offer SEE a cheap deal. It is still a lender taking risk.

But there is an important change in the negotiating dynamics. SEE now has a rapidly growing automotive royalty stream, while Magna has demonstrated a willingness to extend the existing arrangement.

If Magna believes SEE’s value is increasing, it may have good reason to remain involved.

The next two months should therefore tell us something important: how vital a strategic asset is Seeing Machines to Magna?

The writer holds stock in Seeing Machines.

Seeing Machines: the refinancing delay is good news

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At first glance, Seeing Machines’ (AIM: SEE) decision to extend its Magna convertible loan notes from October 4 to November 30 looks like another refinancing setback. I think investors should read it differently.

The key sentence in today’s RNS is that the existing Magna arrangement is preferable to the “presently proposed refinance debt package”. In other words, Seeing Machines has apparently been offered a refinancing package – but the terms are not attractive enough for management to accept it.

That is positive: the question is no longer whether SEE can refinance, but to what extent it can further improve the terms?

It also shows that Magna needs Seeing Machines as much as it needs Magna. Magna has agreed to extend the loan for almost two months rather than insist on repayment on October 4. The precise commercial considerations behind that decision aren’t known, but it suggests that maintaining the relationship has value for both sides.

The next eight weeks should materially strengthen SEE’s negotiating position. Automotive royalty revenues accelerated dramatically in the second half of FY2026, with Q4 production reaching 2.1m vehicles, while $25.3m of trade receivables and royalties were outstanding at June 30. H2 cashflow was already positive. More royalty cash arriving during October and November should reduce the amount SEE needs to borrow and potentially give it greater leverage with lenders.

But there is another intriguing possibility.

Robotics deal

SEE has recently launched its Human-Centred Physical AI platform for robotics and, unusually, CEO Paul McGlone specifically highlighted the market reaction to it in today’s refinancing announcement. SEE also announced an advanced robotics development contract in August – with Mitsubishi, I believe.

If that work were to develop into a significant licensing or commercial agreement, it would materially change the refinancing equation.

We can’t assume such a robotics deal is imminent (though, personally, I suspect it may be closer than the market realises). But if it were to occur, say in October, the negotiations with lenders could look very different indeed.

For now, the two-month extension may be less a sign of weakness than a cunning opportunity for SEE to improve its hand.

The writer holds stock in Seeing Machines.

Is Mitsubishi involved in the Seeing Machines refinance?

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Seeing Machines’ refinancing is getting close to the point where investors should finally find out who is prepared to put money behind the company.

The US$47.5m convertible loan note, held by Magna, matures on October 4. In July, Seeing Machines said it had received multiple term sheets from potential lenders. Then, in August, came a more significant update: the company said it had agreed indicative terms and entered an exclusive negotiation period with a potential lender.

So who is behind the deal?

One possibility that I keep coming back to is Mitsubishi.

Mitsubishi Electric Mobility is Seeing Machines’ largest shareholder, with a 19.9 per cent stake. It invested £26.2m in the company in December 2024, helping strengthen Seeing Machines’ balance sheet while establishing a much closer strategic relationship between the two businesses.

The relationship goes considerably further than simply owning shares. Seeing Machines has an automotive production programme with Mitsubishi in Japan, while the two companies have been pursuing opportunities together in automotive and aftermarket markets.

The relationship may also be about more than cars. Seeing Machines and Mitsubishi are working together in robotics and Physical AI, potentially giving Mitsubishi a strategic interest in the company’s technology well beyond automotive.

That makes Mitsubishi an obvious candidate when considering who might have an interest in ensuring Seeing Machines remains properly funded.

But there is an important reason not to jump to the conclusion that Mitsubishi itself is providing the refinancing.

Seeing Machines said it had been talking to a number of potential lenders and had received multiple term sheets. That sounds more like a competitive financing process involving banks or specialist lenders than a straightforward shareholder loan.

There is, however, another intriguing possibility.

Mitsubishi Electric has established relationships with major Japanese banks. MUFG Bank is one of its principal lenders, with Mizuho Bank also among its significant banking relationships. If a Japanese bank were involved in the Seeing Machines refinancing, it would provide a possible link between Mitsubishi’s strategic interest and the financing.

MUFG is particularly interesting because it has a long-standing relationship with the wider Mitsubishi group. But there is currently no public evidence that MUFG, Mizuho or another Japanese bank is involved in Seeing Machines’ refinancing.

There is another reason Mitsubishi could be watching closely. Its proposed automotive alliance with Foxconn has highlighted the importance of electrification, autonomous driving and software-defined vehicles — areas in which Seeing Machines’ driver-monitoring, occupant-monitoring and emerging Physical AI technology could become increasingly relevant.

So there are three broad possibilities.

Mitsubishi could provide some or all of the refinancing itself. A Japanese bank with a relationship with Mitsubishi could be involved. Or the lender could simply be an entirely independent bank or private-credit investor attracted by Seeing Machines’ rapidly improving financial performance.

Most investors are probably betting on the third possibility.

But if the refinancing announcement does reveal a Mitsubishi connection — particularly through a Japanese financial institution — it could be considerably more significant than simply removing a financial overhang.

It could signal that Mitsubishi sees Seeing Machines as a strategic technology company with a future that extends well beyond the car industry.

The writer holds stock in Seeing Machines.

Seeing Machines set to become a robotics play

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Seeing Machines is increasingly looking like more than an automotive technology story. Indeed, it is on the path to becoming a robotics play.

The company has successfully completed a robotics proof of concept, and CEO Paul McGlone has said he expects it to progress into product development, licensing and ultimately revenue. There is no timetable yet, but the important point is that the technology appears to have passed the first big test: it works.

So what happens next?

One possibility is particularly intriguing. Mitsubishi Electric and Sony Semiconductor Solutions are establishing Advanced Vision Solutions, a joint venture focused on AI vision, factory automation, autonomous operation and physical AI. It is due to start operating in October.

Seeing Machines has not named the customer behind its robotics POC. Still, there are some intriguing clues pointing towards Mitsubishi. SEE has an established strategic partnership with Mitsubishi Electric Mobility under which the companies have explicitly agreed to explore adjacent markets, and SEE’s February investor presentation specifically identified ‘smart factory’ as one of those opportunities.

If so, a product-development agreement with Seeing Machines around the time the JV launches would be a very interesting development.

And Ambarella adds another strand to the story.

Seeing Machines already works with Ambarella, whose CVflow processors are increasingly being used for robotics and industrial AI. There is no evidence that Ambarella is part of the Sony-Mitsubishi JV — and it doesn’t need to be.

Seeing Machines could potentially be working with different hardware partners on different physical-AI applications.

That is what makes the opportunity so interesting.

The company doesn’t need to build the robots, cameras or processors. Its potential role is the perception and human-understanding layer that allows machines to understand people and their environment.

If that technology becomes licensable across multiple robotics platforms, the current valuation — largely based on automotive growth — could look very different.

And with the refinancing risk potentially disappearing at the same time, the next few months could be unusually important for SEE shareholders.

The writer holds stock in Seeing Machines.