[an error occurred while processing this directive]
Skip to Main Contents

Announcement Concerning the Issuance of New Shares and Secondary Offering of Shares

April 2, 2010

Yamaha Motor Co., Ltd. (the "Company") resolved, at a meeting of the board of directors held on April 2, 2010, the issuance of new shares and the secondary offering of shares of the Company, as set forth below

Purpose of this Finance

 

In February 2008, the Company formulated "Frontier 2020" as its long-term vision towards 2020 to outline the Group's plan and business direction.  Concurrently, as Phase I, the Company announced a medium-term management plan (from fiscal year 2008 to fiscal year 2010) under the theme of "the establishment of foundations for a great leap in the next generation", and has made efforts to further develop profits, growth and customer value.  However, the global recession triggered by the international financial system's instability led to a sudden decline in leisure demand especially in the European and United States markets.  As a result of the effects such as a reduction in distribution stock in the European and United States markets and the inclusion of business structure improvement costs, the Company was led to record a significant loss in the financial results for the fiscal period ended December 2009.

In response to this change in business environment and towards the realization of our long-term vision, the Company formulated a new medium-term management plan (from fiscal year 2010 to fiscal year 2012) in February 2010.  In this plan, the Company has established three management policies to aid it in becoming an excellent engineering and manufacturing enterprise with a prominent presence in the global market by returning to the fundamentals of its product development and hands-on policy.

 

1.Reforming the profitability structure of businesses in developed nations

Assuming difficulties in the demand environment, the Company further lowered the annual break-even target for domestic vehicle production which was announced in August 2009.  Accordingly, the Company will reorganize its manufacturing layout in Japan, Europe and the United States.  Also, in addition to surplus workforce reduction measures such as repositioning which have already been implemented, the Company is planning to introduce a voluntary retirement program in Japan and additional workforce reduction in Europe and the United States.

2.Quantitative and qualitative expansion of the motorcycle businesses in emerging nations

In the motorcycle business in emerging nations, which has great growth potential, the Company will aim for an aggressive expansion in quantity and quality.  Especially in the ASEAN market where fuel efficiency is becoming a significant factor in merchantability, in addition to actively releasing fuel-efficient models equipped with the Company's unique technology of fuel injection and aiming to strengthen product appeal, the Company will also aim to increase profitability by enhancing cost-cutting activities.  In the motorcycle business in India and China, the Company will aim to enhance its presence in the market by releasing low-priced models.  In India, in addition to actively releasing low-priced models, the Company will aim to expand its sales volume by implementing area marketing and constructing high-quality sales networks in areas with high expectancy for demand.  Similarly in China, by releasing new models that are compatible with emissions regulation, the Company will enhance its product line and, by constructing high-quality sales networks in the suburbs and rural areas, the Company will set itself apart from the local manufacturers.  The Company will aim to expand its sales volume by attracting customers that are more brand and quality-conscious.  In addition to these measures, the Company will expand its export of motorcycles from India and China to the global market.

3.Laying the groundwork for future growth

Focusing on the area of 'personal mobility' and 'engines' as stated in our long-term vision, "Frontier 2020", the Company will put an emphasis on electrical products (smart power) such as the development of next-generation environmentally friendly engines for motorcycles in the ASEAN region and outboard motors, electric powered motorcycles and electrical power assisted bicycles.  For motorcycles in the ASEAN region, through measures such as further developing its unique technology of the fuel-injection system, the Company will focus on technological development to increase motorcycle fuel efficiency by up to 50% in 2015 when compared with 2008 conventional Yamaha models, which will lead to the strengthening of product competitiveness.  Additionally, for outboard motors, the Company will focus on the technological development of next-generation 4-stroke models that are lightweight, compact and fuel-efficient, targeting an increase in fuel efficiency of up to 30% in 2015, when compared with 2007 conventional Yamaha models, which will achieve product superiority.  Electric powered motorcycles will promptly be re-released in the Japanese market and concurrently, in the medium-term, the Company will seek to create new demand for its products and will promote overseas business in the Taiwanese and European markets.  For electrical power assisted bicycles in which higher demand is expected, as a pioneer in the field, the Company will increase its share in the Japanese market and will facilitate business in the rapidly growing European market.

Proceeds to be raised through this finance will be used for funds for the research and development of next-generation environmentally friendly engines, electric powered motorcycles, electrical power assisted bicycles and low-priced motorcycles for emerging nations.  This will enable the Company to actively invest in technological development for the realization of future growth and at the same time will enhance shareholder value by strengthening its financial base and enhancing its profitability.

1. Issuance of New Shares by way of Offering (Public Offering)
(1) Class and Number of Shares to be Offered 55,000,000 shares of common stock of the Company (the "shares").
(2) Method of Determination of the Amount to be Paid

The amount to be paid shall be determined on the date of determination of the issue price, etc. (which may be a day in the period from Tuesday, April 13, 2010 to Friday, April 16, 2010) (the "Determination Date") in accordance with the method stated in Article 25 of the Regulations Concerning Underwriting, etc. of Securities provided by the Japan Securities Dealers Association ("JSDA").

(3) Amount of Stated Capital and Additional Paid-in Capital to be Increased

The amount of stated capital to be increased shall be half of the maximum increased amount of stated capital, as calculated in accordance with the provision of Article 14, Paragraph 1 of the Rules of Account Settlement of Corporations with any fraction less than one yen resulting from the calculation being rounded up to the nearest yen.  The amount of the additional paid-in capital to be increased shall be the amount obtainable by subtracting the amount of stated capital to be increased from the maximum amount of stated capital increase.

(4) Method of Offering

The offering shall be a public offering.  All of the new shares shall be purchased for sale by the underwriting syndicate lead by Nomura Securities Co., Ltd. ("Nomura Securities") as the lead manager in the public offering (collectively, the "Underwriters").  The issue price with regard to the Public Offering (offer price) shall be determined, based on the provisional range calculated by multiplying the closing price in regular trading of the shares on the Tokyo Stock Exchange on the Determination Date (or, if no closing price is quoted, the closing price of the immediately preceding date) by 0.90-1.00 (with any fraction less than one yen being rounded down), in accordance with the method stated in Article 25 of the Regulations Concerning Underwriting, etc. of Securities provided by the JSDA, taking into account market demand.

(5) Consideration to be paid to the Underwriters

The Company shall not pay any underwriting fees to the Underwriters.  Instead, the aggregate amount of the difference between (a) the issue price in the Public Offering (offer price) and (b) the amount to be paid to the Company by the Underwriters shall be taken by the Underwriters.

(6) Subscription Period

The subscription period shall be from the next business day after the Determination Date to the second business day following the Determination Date.

(7) Payment Date

The payment date shall be a day in the period from Tuesday, April 20, 2010 to Friday, April 23, 2010, provided, however, that such day shall be the fifth business day following the Determination Date.

(8) Subscription Unit 100 shares
(9)

The amount to be paid, the amount of stated capital and additional paid-in capital to be increased, and any other matters necessary for issuance of new shares by the Public Offering shall be determined at the discretion of Mr. Hiroyuki Yanagi, the President and Representative Director of the Company.

(10)

The foregoing items shall be subject to the effectiveness of the securities registration statement filed under the Financial Instruments and Exchange Act of Japan.

2.

Secondary Offering of Shares (Secondary Offering by way of Over-Allotment) (See 1. of "For Reference" attached hereto)

(1) Class and Number of Shares to be Sold

8,250,000 shares of common stock of the Company.

The number of shares to be sold mentioned above is the maximum number of shares to be sold.  The above number may be decreased, or the Secondary Offering by way of Over-Allotment may be cancelled entirely, depending on market demand.  The number of shares to be sold shall be determined on the Determination Date, taking into account market demand.

(2) Seller Nomura Securities
(3) Selling Price

Undetermined (The selling price shall be determined on the Determination Date; provided, however, that such selling price shall be the same as the issue price (offer price) for the Public Offering.)

(4) Method of Secondary Offering

Taking into account market demand for the Public Offering, Nomura Securities will undertake a secondary offering of shares (up to 8,250,000) that it will borrow from certain shareholder(s) of the Company.

(5) Subscription Period

The subscription period shall be the same as the subscription period in respect of the Public Offering.

(6) Delivery Date

The delivery date shall be the next business day after the payment date in respect of the Public Offering.

(7) Subscription Unit 100 shares
(8)

The selling price and any other matters necessary for the Secondary Offering by way of Over-Allotment shall be determined at the discretion of Mr. Hiroyuki Yanagi, the President and Representative Director of the Company.

(9)

The foregoing items shall be subject to the effectiveness of the securities registration statement filed under the Financial Instruments and Exchange Act of Japan.

3.

Issuance of New Shares by way of Third-Party Allotment (See 1. of "For Reference" attached hereto)

(1)

Class and Number of Shares to be Offered

8,250,000 shares of common stock of the Company.

(2) Method of Determination for the Amount to be Paid

The amount to be paid shall be determined on the Determination Date; provided, however, that such amount to be paid shall be the same as the amount to be paid in respect of the Public Offering.

(3) Amount of Stated Capital and Additional Paid-in Capital to be Increased

The amount of stated capital to be increased shall be half of the maximum increased amount of stated capital, as calculated in accordance with the provisions of Article 14, Paragraph 1 of the Rules of Account Settlement of Corporations with any fraction less than one yen resulting from the calculation being rounded up to the nearest yen.  The amount of the additional paid-in capital to be increased shall be the amount obtainable by subtracting the amount of stated capital to be increased from the maximum amount of stated capital increase.

(4) Allottee Nomura Securities
(5) Subscription Period (Subscription Date) Monday, May 10, 2010
(6) Payment Date Tuesday, May 11, 2010
(7) Subscription Unit 100 shares
(8)

Shares not subscribed within the subscription period (Subscription Date) mentioned in (5) above shall not be issued.

(9)

The amount to be paid, the amount of stated capital and additional paid-in capital to be increased and any other matters necessary for the Issuance of New Shares by way of Third-Party Allotment shall be determined at the discretion of Mr. Hiroyuki Yanagi, the President and Representative Director of the Company.

(10)

The foregoing items shall be subject to the effectiveness of the securities registration statement filed under the Financial Instruments and Exchange Act of Japan.

[For Reference]
1. Secondary Offering by way of Over-Allotment and other matters

The Secondary Offering by way of Over-Allotment as mentioned in "2. Secondary Offering of Shares (Secondary Offering by way of Over-Allotment)" above, is a secondary offering to be made in relation to the Public Offering mentioned in "1. Issuance of New Shares by way of Offering (Public Offering)" for shares of common stock of the Company, in a number not exceeding 8,250,000 shares, that will be borrowed by Nomura Securities, the Lead Manager of the Public Offering, from certain shareholder(s) of the Company, taking into account market demand.  The number of shares to be offered in the Secondary Offering by way of Over-Allotment is scheduled to be 8,250,000 shares; however, this is the maximum number of shares to be sold, and such number may be decreased, or the Secondary Offering by way of Over-Allotment may be cancelled entirely, depending on market demand.

In connection with the Secondary Offering by way of Over-Allotment, the board of directors of the Company has resolved, at the meeting held on Friday, April 2, 2010, that the Company will issue 8,250,000 shares of common stock of the Company to Nomura Securities by way of third-party allotment (the "Capital Increase by way of Third-Party Allotment"), with the payment date set to be Tuesday, May 11, 2010, in order for Nomura Securities to obtain the number of shares necessary to return the shares of common stock of the Company that will have been borrowed by Nomura Securities from certain shareholder(s) of the Company, as mentioned above (the "Borrowed Shares").

Nomura Securities may also purchase shares of common stock of the Company (the "Syndicate Cover Transactions") on the Tokyo Stock Exchange, up to the number of shares to be offered in the Secondary Offering by way of Over-Allotment, for the purpose of returning the Borrowed Shares.  Such Syndicate Cover Transactions would be made during the period from (a) the day immediately following the last day of the subscription period for the Public Offering and the Secondary Offering by way of Over-Allotment to (b) Wednesday, April 28, 2010 (the "Syndicate Cover Transaction Period").  All of the shares of common stock of the Company purchased by Nomura Securities during the Syndicate Cover Transaction Period will be used to return the Borrowed Shares.  During the Syndicate Cover Transaction Period, Nomura Securities may decide not to conduct any Syndicate Cover Transaction or may decide to terminate the Syndicate Cover Transactions before the number of shares purchased reaches the number of shares offered in the Secondary Offering by way of Over-Allotment.

Nomura Securities may conduct stabilizing transactions along with the Public Offering and the Secondary Offering by way of Over-Allotment. The shares of common stock of the Company purchased through such stabilizing transactions may be used, in whole or in part, to return the Borrowed Shares.

With respect to the number of shares obtained by deducting (a) the number of shares purchased through stabilization transactions and Syndicate Cover Transactions that are to be used to return the Borrowed Shares from (b) the number of shares to be offered in the Secondary Offering by way of Over-Allotment (the "Number of Shares to be Purchased"), Nomura Securities will accept the allotment under the Capital Increase by way of Third-Party Allotment and will purchase an equivalent number of shares of common stock of the Company. As a result, a part or all of the shares to be issued under the Capital Increase by way of Third-Party Allotment may not be subscribed for, which may result in a decrease in the determined number of shares to be issued under the Capital Increase by way of Third-Party Allotment, or in the cancellation of the issuance, due to forfeiture.

In the event that Nomura Securities accepts the allotment under the Capital Increase by way of Third-Party Allotment, it will make payment for the Number of Shares to be Purchased with the fund obtained from the Secondary Offering by way of Over-Allotment.

2.

Change in the number of outstanding shares as a result of this capital increase by Public Offering and the Capital Increase by way of Third-Party Allotment

Total number of outstanding shares at present:

             286,507,784 shares (as of March 31, 2010)

Increase in number of shares as a result of the capital increase by public offering:

             55,000,000 shares

Total number of outstanding shares after the capital increase by public offering:

             341,507,784 shares

Increase in number of shares as a result of the capital increase by way of third-party allotment:

             8,250,000 shares (Note)

Total number of outstanding shares after the capital increase by way of third-party allotment:

             349,757,784 shares (Note)
Notes:

These figures are based on the assumption that the shares to be offered in "3. Issuance of New Shares by way of Third-Party Allotment" are all subscribed by Nomura Securities and issued.

3. Use of proceeds to be raised
(1) Use of proceeds to be raised this time

Proceeds from the Public Offering and Capital Increase by way of Third-Party Allotment of shares to be raised this time, which are estimated to be up to 76,106,720,000 yen in total, are planned to be used in full as funds for research and development.

Under the new mid-term management plan formulated in February 2010, Yamaha Motor group will focus on "growth in the emerging markets and the ASEAN market" and "growth led by accelerated development of environmentally friendly engines and electric operation technologies", and research and development investment for three years from fiscal year 2010 through fiscal year 2012 totaling 202 billion yen is scheduled.  Out of the proceeds to be invested in research and development, 34.7 billion yen has been allocated as investment in the development of next-generation environmentally friendly engines aimed at enhancing fuel consumption efficiency in motorcycles and outboard motors, 19.3 billion yen has been allocated as investment in the development of strategically low-priced motorcycles targeted for developing countries centered around India and China, 8 billion yen has been allocated as investment in the development of new driving power (smart power), pursuing new mobility as represented by electric vehicles such as electric powered motorcycles and electrical power assisted bicycles, and the remainder has been allocated as investment in other developments.  As for the timing for expenditure of the proceeds to be raised, such proceeds are expected to be evenly allocated in each fiscal year from 2010 through 2012.

(2) Change in the use of proceeds raised last time
Not applicable.
(3) Expected impact on business results

The Company believes that by allocating the proceeds for research and development investment toward growth strategy, this will contribute to the strengthening of management foundations as well as the improvement of operation results.

4. Profit distribution to shareholders, etc.
(1)

Basic policy concerning profit distribution

Recognizing that shareholders' interests represent one of Yamaha Motor's highest management priorities, the Company has been striving to maximize its corporate value through a diversity of business operations worldwide.

(2) Concept of determination of dividends

The Company's policy centers on paying cash dividends based on a long-term perspective, reflecting its consolidated financial performance and other factors in a comprehensive manner, using the payout ratio as an indicator, in order to fulfill shareholders' expectations.

(3) Use of retained earnings

The Company will use the retained earnings for strengthening of management foundation, while using such retained earnings for improvement of product appeal, development of environmental technology, etc.

(4) Dividends, etc. for past three fiscal years

FY December
2007

FY December
2008
FY December
2009

Current net income per share
(consolidated)
(△ represent current net loss per share (consolidated))

JPY248.81 JPY6.47 lossJPY755.92

Annual dividends per share
(and interim dividends per share)

JPY41
(JPY20.5)

JPY25.5
(JPY20.5)

JPY0.0
(JPY0.0)

Actual payout ratio
(consolidated)
16.5% 394.3% -%

Net return on equity
(consolidated)

14.2% 0.4% loss71.2%

Ratio of dividends / net assets
(consolidated)

2.3% 1.6% -%
Notes: 1.

The consolidated net return on equity is a fraction, the numerator of which is the consolidated current net income or the consolidated current net loss; and the denominator of which is the equity capital (i.e. the average of the equity capital at the beginning and the end of the relevant fiscal year obtained by deducting stock acquisition rights and minority shareholders' interests from the total net assets).

2.

The consolidated ratio of dividends/net assets is a fraction, the numerator of which is the total amount of dividends per share paid during each fiscal year; and the denominator of which is the consolidated net assets per share (i.e. the average of the net assets per share at the beginning and the end of the relevant fiscal year).

5. Other matters
(1) Designation of party to receive distribution
Not applicable.
(2) Information on dilutive shares

The Company has adopted stock option plan in the form of stock acquisition rights pursuant to the Companies Act of Japan.  

Granted stock options (as of March 31, 2010)
Resolution of the Board of Directors Remaining number of new shares to be issued upon exercise Amount to be paid upon exercise Amount of stated capital to be increased Exercise period
May 29, 2008 75,500 shares JPY2,205 JPY1,370

From June 13, 2010
to June 12, 2014

May 29, 2009 112,000 shares JPY1,207 JPY794

From June 16, 2011
to June 15, 2015

Ratio of underlying residual securities to issued shares (349,757,784 shares) after the Public Offering and the Capital Increase by way of Third-Party Allotment conducted this time is expected to be 0.05%.

(3) Equity finance for past three years
(i) Equity finance
Not applicable.
(ii) Change in share prices for past three fiscal years and at the most recent time point

(in JPY, other than the price/earnings ratio)

FY December
2007
FY December
2008
FY December
2009
FY December
2010
Opening 3,760 2,700 972

1,167

High 3,830 2,700 1,260

1,450

Low 2,630 710 730 1,143
Closing 2,705 932 1,166 1,385
Price/earnings ratio 10.9 144.0 - -
Notes: 1. The share prices for the FY December 2010 above are the prices as of April 1, 2010.
2.

Price/earnings ratio is a fraction, the numerator of which is the share price (closing price) as of the end of each fiscal year; and the denominator of which is the consolidated current net income per share for the relevant fiscal year.  Price/earnings ratio for the FY December 2009 is not stated as the consolidated current net loss is recognized.

(4) Lock-up

In relation to the Public Offering, YAMAHA CORPORATION, a shareholder of the Company has agreed with Nomura Securities not to sell shares of the Company in principle during the period commencing on the Determination Date and ending on the 180th day after the delivery date for the Public Offering (the "Lockup Period") without Nomura Securities' prior written consent.

Moreover, the Company has agreed with Nomura Securities not to issue shares of the Company, securities that can be converted to or exchanged for shares of the Company, or any other securities that represent the right to acquire or receive shares of the Company (excluding the Public Offering, Secondary Offering by way of Over Allotment, the Capital Increase by way of Third-Party Allotment, issuance and transfer of shares of the Company by way of stock split or allotment of shares without consideration, issuance and transfer of shares of the Company by way of exercise of outstanding stock acquisition rights, issuance and transfer of shares of the Company in connection with corporate split, share for share exchange or merger, sales of shares in case that a holder of shares representing less than one unit requests the Company to sell such number of shares of the Company as may be necessary to raise its share ownership to a whole unit, issuance of the stock options for executives and regular employees of the Company and affiliated companies of the Company, and issuance of stock acquisition rights pursuant to the "Takeover Defense Measures Against Attempts of Mass Acquisition of the Company’s Shares" approved by the resolution of the ordinary general meeting of shareholders held on March 25, 2010, issuance and transfer of shares of the Company upon exercise of such stock acquisition rights or issuance and transfer of shares of the Company in exchange for acquisition by the Company of such stock acquisition rights) during the Lockup Period without Nomura Securities' prior written consent.

In relation to any of the above, Nomura Securities have the authority to waive a part or all of the conditions of that agreement during the Lockup Period at their own discretion.

 

Note:  This press release does not constitute an offer of any securities for sale.  This press release has been prepared for the sole purpose of publicly announcing that the Company has resolved matters relating to the issuance of new shares and the secondary offering of our shares, and not for the purpose of soliciting investment or engaging in any other similar activities within or outside Japan.  Investors for our shares should carefully review a prospectus as well as any amendments thereto prepared by the Company prior to making any investment decisions.  This press release is not an offer of securities for sale in the United States.  The securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933.  No offer of securities in the United States will be made in connection with the above-mentioned transactions.



Back to
Top