TOYO TIRE held ¥112.143 billion in cash and cash equivalents at the end of June and announced on 7 August that the cap on its treasury share purchases would be ¥115.264 billion. The company plans to acquire up to 32 million shares, equivalent to approximately 20.78% of issued shares, and cancel them on 30 September.
Cash and cash equivalents stood at ¥112.143 billion at the end of June, and the cap on treasury share purchases was announced at ¥115.264 billion on 7 August. The cap is close to the company’s cash balance, but the purchase amount and date remained undetermined based on the disclosure documents available at the time, and whether the actual purchase will be completed at the cap will be confirmed later.
The purchase covers up to 32 million shares, equivalent to approximately 20.78% of shares outstanding excluding treasury shares. The shares acquired are scheduled to be cancelled on 30 September, and the cancellation could affect the shareholder composition.
Mitsubishi Corporation, the largest shareholder, announced its intention to sell shares on the same day. It holds approximately 30,822,206 shares, representing 20.01% on a voting-rights basis. If TOYO TIRE completes the purchase as planned, the capital and business alliance launched in 2019 is expected to be terminated effective 10 August.
The buyback was announced as weak demand in the North American market and system problems weighed on earnings, creating a situation in which the company’s financial headroom and core business challenges are being considered at the same time.