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Kyokuyo Issues Convertible Bonds for Capital Investment

November 22, 2013

Kyokuyo Co., Ltd. in Tokyo under management of President Hisaki Tada, in a bid to perform smooth future capital investment, reached a decision on Nov. 20 to issue JPY 3 billion (€21.8 million/$29.5 million) worth of yen-denominated convertible (warrant) bonds, expected to mature in 2018.

One of the strategic moves in the Company’s mid-term business plan “Power up Kyokuyo 2015,” which kicked off in April 2012, is their embarkation on commercial frozen foods. The most of frozen food products manufactured by the Company has been for professional use only. By branching out into a new customer base, they aim to shore up the business foundation.

With the introduction of a new commercial brand “Sea Marche” and its product line back in June, the plan to expand commercial products went underway. A release of a new frozen food product line for households is scheduled for next spring. To this end, the Company is slated to build a new factory in Shiogama City, Miyagi Prefecture with an estimated total cost of JPY 4.5 billion (€32.7 million/$44.2 million).

With these goals in place, vigorous capital investment for continuous business growth and construction of a financial base resilient to changes in the future business environment are the reasons behind the issuance of the convertible bonds.

The value of assets invested for exercising share options is considered to be equivalent to the face amount of the corporate bonds at the conversion value of JPY 337 (€2.5/$3.3).

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