Japan's Hitachi Ltd <6501.T> said on Wednesday it still expects to win an order for a large train project in Britain, but it acknowledged that some modifications to the $11 billion deal were likely.
Shares in Japan's biggest electronics maker have been under pressure in recent sessions after media reports that the train project may be canceled or delayed given a spending squeeze at Britain's transport department.
A Hitachi consortium was chosen as a preferred bidder for the deal in 2009.
The company is hoping to use the project as leverage to double its train system sales in six years and to better compete with Germany's Siemens , Canada's Bombardier and France's Alstom in the global train systems market.
This project is to replace 30-year-old trains, and we don't expect the project itself to be scrapped, Gaku Suzuki, head of Hitachi's train business, said at a company investor relations event.
There will probably be some modifications due to the change in the government, but we believe we can still do it.
Hitachi, a sprawling conglomerate which offers everything from nuclear power plants to computers to rice cookers, sees its ability to integrate IT and infrastructure-related products as its advantage against global rivals.
It also wants to cash in on the strength and more than double its company-wide profit over the next three years.
To offer comprehensive IT services, Hitachi said it wants to buy an IT company or business that generates about $3 billion in annual sales as part of its plans to double overseas sales in six years.
Junzo Nakajima, head of Hitachi's IT division, said possible targets include existing data centers and Hitachi could spend hundreds of billions of yen on the acquisition. He declined to be more specific.
Our information and telecommunication business generates about 50-100 billion yen ($546 million-$1.1 billion) in cash flow every year, so you can imagine how much we would be able to spend on the acquisition over several years, he said.
Hitachi says it plans to use acquisitions to expand many of its businesses, contrary to its past plan to slash the number of its subsidiaries to below 800 from more than 900. It currently has 900 group firms.
In its power business, another focus area for Hitachi, it said it was not planning to change the ownership structure of its nuclear power joint ventures with General Electric .
Earlier this month a Hitachi spokesman said the company was reviewing the structure of its partnership with GE, as part of an overhaul of Hitachi's global sales network.
Koji Tanaka, head of Hitachi's power business, said the companies will work together more closely to expand overseas sales. Hitachi has been leading Japan sales, while GE has been in charge of other markets.
GE, the largest U.S. conglomerate, said at the time it had held no talks with Hitachi about changing the ventures. They compete with the likes of Japan's Toshiba <6502.T> and France's Areva in nuclear power.
The companies teamed up in 2007 and set up joint ventures in Japan and the United States. Hitachi owns 80 percent of the Japanese venture, while GE has a 60 percent stake in the American company, which caters to the U.S. and other overseas markets.
Hitachi aims to increase power business sales by 36 percent to 1.2 trillion yen in six years, led by overseas growth.
Hitachi shares fell 2.6 percent to 340 yen, underperforming a 1 percent fall in the benchmark Nikkei average <.N225>.
(Reporting by Sachi Izumi; Editing by Hugh Lawson)