Suzuki plans $1.8b bond sale, can­cels most VW shares

The Pak Banker - - COMPANIES/BOSS -

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.

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