Suzuki plans $1.8b bond sale, cancels most VW shares
Suzuki Motor Corp. plans to sell 200 billion yen ($1.8 billion) of convertible bonds and cancel most of the stock it bought back from Volkswagen AG last year, as the Japanese automaker expands in India following a failed alliance.
Suzuki will sell the bonds primarily to fund the 185 billion rupee ($2.8 billion) factory it's building in India's western Gujarat state, according to a statement filed Monday to the Tokyo stock exchange. The automaker also will cancel 70 million treasury shares, or 12.5 percent of outstanding stock, to boost returns for investors after ending its partnership with Volkswagen in September, the company said in separate statement.
President Toshihiro Suzuki, who took over from his father and Chairman Osamu Suzuki in June, has been under pressure both to press ahead with expansion in the company's largest market and reward shareholders who lost out on any value from an alliance with Volkswagen, which failed to yield any joint projects.
Daniel Loeb, whose hedge fund Third Point LLC disclosed it bought a stake in the carmaker in August, told reporters the automaker should cancel all the stock bought back from Volkswagen.