Japan's Mitsubishi Motors Corp said on Monday an Egyptian sales firm is suing it for $900 million in damages, complaining it "unfairly" ended a distribution contract.

In a suit filed in an Egyptian court, sales firm Masria Co said Mitsubishi's termination notice lacked reasonable grounds and demanded an extension of the contract or damages of $900 million, equivalent to 56 percent of Mitsubishi Motors' net assets, the automaker said.

Mitsubishi, Japan's sixth-largest automaker, said it served a termination notice on Masria six months before the contract was due to expire, in accordance with agreed provisions.

"Mitsubishi Motors will strenuously fight this lawsuit," it said in a statement.

Separately, the Japanese automaker slashed its estimate of annual operating profit by 54 percent to 13.8 billion yen ($149.7 million) citing a drop in vehicle sales and the failure to fully meet its planned cost reductions.

A spokesman said Mitsubishi Motors expected no impact from the lawsuit.   

The maker of the Pajero SUV lowered its net profit estimate for the year ended March 31 by 6 percent, to 4.7 billion yen, shored up by the yen's recent weakening. - Reuters