Source: Reuters
Mazda Motor Corp is looking to raise up to US$2 billion in a bigger-than-expected public share offering, a regulatory filing showed on Wednesday, which would cause a massive 69 per cent dilution of its existing shares.
The share offering eclipsed expectations of JPY100 billion that had been flagged by financial sources. If the overallotment portion of the offer is excluded, Mazda would be raising JPY147 billion (US$1.8 billion) and dilution would be 62 per cent.
The loss-making Japanese automaker, which is seeking to fund a new plant in Mexico, as well as ventures in Russia and Southeast Asia, also said it will seek JPY70 billion in subordinated loans.
Battered by a strong yen, the nation’s No.5 automaker is set to post its fourth straight annual net loss in the financial year to March. This month it predicted red ink of JPY100 billion, much worse than an earlier estimate of a JPY19 billion loss.
A Mazda official said the company has no plans to hold a news briefing.
Mazda, which makes the Mazda2 subcompact and the Mazda3 compact car, is the most exposed among Japanese automakers to currency swings, building about 70 per cent of its vehicles in Japan and exporting 90 per cent of those last year.
Other capital expenditure plans for the Hiroshima-based company include the introduction of its next-generation engine and transmission technology on all its cars by around 2016.
Mazda shares ended 1.4 per cent higher before the announcement, after tumbling 10 per cent on Tuesday on reports about the capital raising plans.
