Japan: Suzuki to sell 1.8% shareholding to banks and suppliers; plans major production rise
Tuesday, January 30, 2007, AutomotiveWorld.com
Suzuki Motor will reportedly sell about 9.59 million of its own shares or 1.8% of its total shares outstanding to Nippon Steel and four other shareholders to enhance its relationship with them, according to Reuters.
The transaction is valued at ¥32bn (US$263m), or ¥3,338 (US$27.38) per share. This represents a 3.5% discount to 29 January's closing price of ¥3,460 (US$28.38), the newswire notes.
Nippon Steel is expected to buy about 3.595 million shares, boosting its total stake in the OEM to 1%. JFE Steel Company plans to purchase about 2.996 million shares in Suzuki to lift its stake to 0.6%.
Bank of Mitsubishi UFJ Financial Group, Shizuoka Bank and Mizuho Corporate Bank are likely to purchase one million shares each, increasing their stakes in the OEM to 3.3%, 2.7% and 0.6% respectively.
Upon the completion of the deal, Suzuki will have about 17% of its own shares, the number almost equivalent to the shares it bought back from General Motors last year.
The proceeds of the deal are likely to be utilised for investment and loans to its affiliated companies overseas as well as at home, a company spokesman said, noting the sale will not affect earnings estimates for the fiscal year ending 31 March 2007.
Suzuki is planning to lift its overseas production by 19% to 1.35 million units this year, with added capacity in India, Pakistan, Hungary and Canada, in order to meet strong demand. The OEM aims to sell 2.35 million cars worldwide this year (up 8%), while it expects to raise its global car output by 9% year-on-year to 2.559 million units, Reuters reports. Last year, the company's global car production grew by 10% to 2.342 million units, while sales rose by 8% to 2.174 million units.
Published on Tuesday, January 30, 2007
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