October 18, 2023
Tsubaki Nakashima Co., Ltd.
Koji Hirota,
Director and Representative Executive Officer CEO
(Code: 6464, Prime, Tokyo Stock Exchange)
Contact for inquiries: Ikunori Morita
Phone: +81 (0)6-6224-0193
Notice of Offering of 17th Share Acquisition Rights and 1st Series Unsecured
Convertible Bonds with Share Acquisition Rights to be Issued Through Third-Party
Allotment
Tsubaki Nakashima Co., Ltd. (the "Company") hereby announces that its Board of Directors, at a meeting held on October 18, 2023, resolved to conduct an offering of share acquisition rights (the "Share Acquisition Rights") and convertible bonds with share acquisition rights (the "Bonds with Share Acquisition Rights," and the bonds thereof are hereinafter referred to as the "Bonds," and the share acquisition rights attached thereto are hereinafter referred to as the "Convertible Bond-Type Share Acquisition Rights") to be issued through a third-party allotment. The details are described below.
Please also refer to the "Notice of Business Alliance" dated today.
1. Overview of Offering 17th Share Acquisition Rights
(1) | Allotment date | November 9, 2023 | |
Under the Subscription Agreement (as defined below), the Scheduled | |||
Allottee agrees to pay the total amount of issue price on the due date of | |||
payment provided that the conditions set out in the Subscription | |||
Agreement are satisfied. | |||
(2) | Total number of share | 62,814 acquisition rights (466 yen per Share Acquisition Right) | |
acquisition rights | |||
(3) | Issue price of Share | 29,271,324 yen in total | |
Acquisition Rights | |||
(4) | Number of dilutive | Number of dilutive shares at the initial exercise price (796 yen): | |
shares resulting from | 6,281,400 shares | ||
issuance | Number of dilutive shares at the Floor Exercise Price (676 yen): | ||
7,396,441 shares | |||
(5) | Amount of funds to be | 5,029,265,724 yen (estimated net proceeds: | 5,024,265,724 yen) |
procured | (Note) | ||
(Breakdown) | |||
Issuance of the Share Acquisition Rights: | 29,271,324 yen | ||
Exercise of the Share Acquisition Rights: | 4,999,994,400 yen | ||
(6) | Exercise price | 796 yen per share | |
If the average closing price (rounded up to the nearest yen; the | |||
"Revision Date Price") of the common shares of the Company in | |||
regular trading on the Tokyo Stock Exchange, Inc. (the "TSE") over the |
This press release has been prepared for the purpose of publicly announcing the issuance by the Company of share acquisition rights and convertible bonds with share acquisition rights by way of third-party allotment, and not for the purpose of soliciting investment or engaging in any other similar activities.
The forecasts, estimations, prospects and other information pertaining to future outcomes included in this press release are based on the information available to the Company as of today and certain conditions or assumptions, and the actual operating results, etc. may differ significantly from the information pertaining to future outcomes included in this press release due to domestic and foreign financial conditions, foreign exchange trends, or other risk factors.
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20 consecutive trading days ending on (and including) May 9, 2024, May 9, 2025, and May 9, 2026 (individually or collectively, the "Revision Date") is lower than the exercise price effective on the Revision Date by one yen or more, the exercise price shall be revised to the Revision Date Price from the Revision Date onward. However, if the amount obtained as a result of the above calculation is less than the Floor Exercise Price (as defined below), the revised exercise price shall be the Floor Exercise Price. The "Floor Exercise Price" shall be 676 yen (the product of the initial exercise price multiplied by 85%.)
(7) | Method of offering or | By way of third-party allotment | |
allotment | |||
(8) | Scheduled allotee | AAGS S6, L.P. | |
(9) | Other Matters | The | Company will today execute the subscription agreement (the |
"Subscription Agreement") regarding the Share Acquisition | |||
Rights and Bonds with the Share Acquisition Rights with AAGS | |||
S6, L.P. (the "Scheduled Allotee"). The following matters will | |||
be set out in the Subscription Agreement. The date on which | |||
the Share Acquisition Rights will be allotted to the Scheduled | |||
Allottee is November 9, 2023. | |||
(i) | The Scheduled Allotee will not exercise the Share Acquisition | ||
Rights from November 10, 2023 to May 9, 2024. | |||
(ii) | Notwithstanding (i), if (A) an early redemption event prescribed | ||
in the terms and conditions occurs, (B) it is discovered that the | |||
conditions precedent provided for in the Subscription Agreement | |||
are not satisfied on the due date of payment, (C) the Company | |||
agrees to the exercise of the Share Acquisition Rights by the | |||
Scheduled Allottee, (D) trading of the common shares of the | |||
Company on the TSE has been suspended for a period of five | |||
trading days or more, (E) the Company is in material breach of | |||
any of its obligations, representations, or warranties under the | |||
Subscription Agreement, or (F) the Company fails to lawfully | |||
submit the Annual Securities Report or Quarterly Securities | |||
Report, the Scheduled Allottee may exercise the Share | |||
Acquisition Rights at any time thereafter. | |||
(iii) | The following matters will be set out in the Subscription | ||
Agreement. For further information, please refer to "(5) First | |||
Refusal Right" and "(6) Put options regarding the Share | |||
Acquisition Rights" under "6. Reason for Selection of Scheduled | |||
Allottee, Etc." below. | |||
- | First refusal right | ||
- | Put options regarding the Share Acquisition Rights |
Note: | The amount of funds to be procured shall be the aggregate amount of total issue price of the Share |
Acquisition Rights and the exercise price calculated on the assumption that all of the Share Acquisition | |
Rights are exercised at the initial exercise price. If the Share Acquisition Rights are not exercised | |
within the exercise period of the Share Acquisition Rights or cancelled by the Company, the amount of | |
funds procured will decrease. |
1st Series Unsecured Convertible Bonds with Share Acquisition Rights
(1) Due date of payment | November 9, | 2023 |
The allotment date of the Bonds with Share Acquisition Rights is | ||
November 9, | 2023. | |
Under the Subscription Agreement, the Scheduled Allottee agrees to | ||
pay the total amount of issue price on the due date of payment provided |
This press release has been prepared for the purpose of publicly announcing the issuance by the Company of share acquisition rights and convertible bonds with share acquisition rights by way of third-party allotment, and not for the purpose of soliciting investment or engaging in any other similar activities.
The forecasts, estimations, prospects and other information pertaining to future outcomes included in this press release are based on the information available to the Company as of today and certain conditions or assumptions, and the actual operating results, etc. may differ significantly from the information pertaining to future outcomes included in this press release due to domestic and foreign financial conditions, foreign exchange trends, or other risk factors.
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that the conditions set out in the Subscription Agreement are satisfied. | |||
(2) Total number of share | 40 acquisition rights | ||
acquisition rights | |||
(3) Issue price of Bonds and | 100.2 yen per 100 yen of each Bond | ||
Share Acquisition Rights | However, no payment in exchange for the Convertible Bond-Type | ||
Share Acquisition Rights is required. | |||
(4) | Number of dilutive | Number of dilutive shares at the initial conversion price (796 yen): | |
shares resulting from | 12,562,800 shares | ||
issuance | Number of dilutive shares at the Floor Conversion Price (676 yen): | ||
14,792,800 shares | |||
(5) Amount of funds to be | 10,020,000,000 yen (estimated net proceeds: 10,010,000,000 yen) | ||
procured | |||
(6) | Exercise price or | 796 yen per share | |
conversion price | If the average closing price (the Revision Date Price) of the common | ||
shares of the Company in regular trading on the TSE over the 20 | |||
consecutive trading days ending on (and including) May 9, 2024, May | |||
9, 2025, and May 9, 2026 (the Revision Date) is lower than the | |||
conversion price effective on the Revision Date by one yen or more, the | |||
conversion price shall be revised to the Revision Date Price from the | |||
Revision Date onward. However, if the amount obtained as a result of | |||
the above calculation is less than the Floor Conversion Price (as defined | |||
below), the revised conversion price shall be the Floor Conversion | |||
Price. The "Floor Conversion Price" shall be 676 yen (the product of | |||
the initial conversion price multiplied by 85%.) | |||
(7) Method of offering or | By way of third-party allotment | ||
allotment | |||
(8) | Scheduled allotee | AAGS S6, L.P. | |
(9) | Other Matters | The Company will today execute the Subscription Agreement regarding | |
the Share Acquisition Rights and Bonds with the Share Acquisition | |||
Rights with the Scheduled Allotee. The date on which the Bonds with | |||
the Share Acquisition Rights will be allotted to the Scheduled Allottee | |||
is November 9, 2023. | |||
(i) | The Scheduled Allottee shall not exercise the Convertible Bond- | ||
Type Share Acquisition Rights if the closing price of the common | |||
shares of the Company in regular trading on the trading day | |||
immediately prior to the date on which the Scheduled Allotee | |||
intends to request to exercise the Convertible Bond-Type Share | |||
Acquisition Rights (if no closing price is available for the last | |||
trading day before that day, then the closing price on the most | |||
recent trading day prior to that day) is lower than the product of | |||
the conversion price effective on the day on which the Scheduled | |||
Allotee intends to request to exercise the Convertible Bond-Type | |||
Share Acquisition Rights multiplied by 1.2 (rounded down to the | |||
nearest whole yen). However, if the Scheduled Allottee intends | |||
to request to exercise the Convertible Bond-Type Share | |||
Acquisition Rights, the Scheduled Allottee may convert the | |||
Convertible Bond-Type Share Acquisition Rights to the extent | |||
that (A) the cumulative number of common shares of the | |||
Company to be acquired by such conversion and the cumulative | |||
number of common shares of the Company acquired by the | |||
Scheduled Allottee by the time of such conversion does not | |||
exceed (B) the cumulative number of common shares of the | |||
Company sold by the Scheduled Allottee by the time of such | |||
conversion (including the case where the cumulative number in |
This press release has been prepared for the purpose of publicly announcing the issuance by the Company of share acquisition rights and convertible bonds with share acquisition rights by way of third-party allotment, and not for the purpose of soliciting investment or engaging in any other similar activities.
The forecasts, estimations, prospects and other information pertaining to future outcomes included in this press release are based on the information available to the Company as of today and certain conditions or assumptions, and the actual operating results, etc. may differ significantly from the information pertaining to future outcomes included in this press release due to domestic and foreign financial conditions, foreign exchange trends, or other risk factors.
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(A) exceeds the cumulative number in (B), but the excess number is lower that the number of common shares of the Company to be acquired in exchange for one Convertible Bond-Type Share Acquisition Right that is effective on the day on which the Scheduled Allottee intends to request to exercise the Convertible Bond-Type Share Acquisition Rights).
- Notwithstanding (i), if (A) an early redemption event prescribed in the terms of issue occurs, (B) it is discovered that the conditions precedent provided for in the Subscription Agreement are not satisfied on the due date of payment, (C) the Company agrees to the exercise of the Convertible Bond-Type Share Acquisition Rights by the Scheduled Allottee, (D) trading of the common shares of the Company on the TSE has been suspended for a period of five trading days or more, (E) the Company is in material breach of any of its obligations, representations, or warranties under the Subscription Agreement, or (F) the Company fails to lawfully submit the Annual Securities Report or Quarterly Securities Report, the Scheduled Allottee may exercise the Convertible Bond-Type Share Acquisition Rights at any time thereafter.
- The following matters will be set out in the Subscription Agreement. For further information, please refer to "(5) First Refusal Right" under "6. Reason for Selection of Scheduled Allottee, Etc." below.
- First refusal right
2. Purpose of and Reasons for Offering
The Company's group (the "Group") consists of the Company and 22 domestic and overseas consolidated subsidiaries that manufacture and sell precision balls, precision rollers, ball screws, blowers, and other precision components. As a manufacturing company, the Group places "safety, quality, and environment" at the top of its management priorities and seeks to carry out its business activities in harmony with society, local communities, and nature. The Group is accelerating the globalization of medical products and other products that meet the needs for high-quality healthcare in response to the COVID-19 and the aging of the population toward the realization of a decarbonized society in the future. The Group is working daily to steadily implement its management strategy, achieve further profitable growth, and become a shining company that continues to create corporate value. In addition, the Group has formulated a Mid-Term Strategy "Transform Next 2023," which ends in the fiscal year ending December 31, 2023, and aims to become a "Best in Class" manufacturing company that engages in "base technology innovation," "Monozukuri innovation," "generating cash to execute strategic investments," and other initiatives.
Under these circumstances, the Group's current management policies include: (A) strengthening sales by reviewing unprofitable products and other measures and restoring earning power by rebuilding the U.S. and linear businesses, and (B) improving development speed, streamlining and strengthening development resources, investing in human resources, and strengthening DX initiatives in order to become a "Best in Class" manufacturing company. The Group believes that the realization of these goals will lead to an increase in the corporate value of the Group.
The Company concluded that, in order to ensure the implementation of the above measures, it would be effective to combine its own resources with external alliances to raise the necessary funds and carry out the measures. It then received a proposal from Advantage Advisors Co., Ltd. (Address: Toranomon Towers Office 4-1-28 Toranomon, Minato-ku Tokyo; Representative Director: Taisuke Sasanuma; "Advantage Advisors"), to provide various types of business support to the Group, as well as information, customer referrals, and financing through Advantage Advisors' group network. Since around May 2023, the Company has continued discussions with Advantage Advisors while exchanging information and holding
This press release has been prepared for the purpose of publicly announcing the issuance by the Company of share acquisition rights and convertible bonds with share acquisition rights by way of third-party allotment, and not for the purpose of soliciting investment or engaging in any other similar activities.
The forecasts, estimations, prospects and other information pertaining to future outcomes included in this press release are based on the information available to the Company as of today and certain conditions or assumptions, and the actual operating results, etc. may differ significantly from the information pertaining to future outcomes included in this press release due to domestic and foreign financial conditions, foreign exchange trends, or other risk factors.
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meetings with them, and after careful consideration of Advantage Advisors' specific proposal as well as their track record of support for multiple listed companies, the Company determined that forming a business alliance with Advantage Advisors and issuing share acquisition rights and convertible bonds with share acquisition rights by way of a third-party allotment to a fund serviced by Advantage Advisors is the most appropriate proposal to enhance the corporate value of the Group, on the basis that (i) in addition to Advantage Advisors' extensive consulting experience, they will be able to provide high-level management support as the Company addresses the business challenges it has identified, and (ii) the issuance of the Share Acquisition Rights and the Bonds with Share Acquisition Rights by way of a third-party allotment as proposed by Advantage Advisors is the most suitable fund-raising method for the Company, as described in "Reasons for selecting financing through share acquisition rights and convertible bonds with share acquisition rights" in "(2) Specific use of funds to be procured" in "3. Amount of funds to be procured, purpose of use, and scheduled timing of expenditure" below. As such, the Company determined at the Board of Directors meeting held today to enter into a business alliance with Advantage Advisors.
3. Amount of funds to be procured, purpose of use, and scheduled timing of expenditure
- Amount of funds to be procured (estimated net proceeds)
Total amount to be paid in (yen) | Estimated amount of issuance | Estimated net proceeds (yen) |
costs (yen) | ||
15,049,265,724 | 15,000,000 | 15,034,265,724 |
Note: 1. Consumption taxes and the like are not included in the estimated amount of issuance costs.
- Issuance costs are mainly comprised of fiscal agent fees, attorney's fees, third-party appraiser fees, expenses for investigating anti-social forces, other administrative expenses (printing service expenses, registration expenses), and the like.
- The total amount to be paid in is calculated on the assumption that all of the Share Acquisition Rights are exercised. If the Share Acquisition Rights are not exercised within the exercise period or the Share Acquisition Rights acquired by the Company are cancelled, the total amount to be paid in and the estimated net proceeds will decrease.
- The estimated amount of issuance costs is the sum of the estimated amount of issuance costs for the Share Acquisition Rights (5,000,000 yen) and the estimated amount of issuance costs for the Bonds with Share Acquisition Rights (10,000,000 yen), and the estimated net proceeds is the sum of the estimated net proceeds for the Share Acquisition Rights (5,024,265,724 yen) and the estimated net proceeds for the Bonds with Share Acquisition Rights (10,010,000,000 yen).
- Specific use of funds to be procured
In respect of the 15,034,265,724 yen of the abovementioned estimated next proceeds (5,024,265,724 yen from the Share Acquisition Rights and 10,010,000,000 yen from the Bonds with Share Acquisition Rights), the funds for increasing production, improving quality, and enhancing profitability are scheduled to be allocated by no later than October 2028. The specific breakdown of such funds is as follows.
Until their actual expenditure, the procured funds will be securely managed as in the bank accounts of the Company.
In respect of the 10,010,000,000 yen of the estimated next proceeds that pertain to the Bonds with Share Acquisition Rights, the funds are scheduled to be allocated mainly to (A) capital expenditure to increase production of ceramic balls, steel balls, and medical parts, (B) capital expenditure to supply high quality products, (C) capital expenditure to improve profitability in the U.S. Business by changing work schedules, streamlining logistics, and incorporating high value-added products, and (D) capital expenditure to improve thermal efficiency, switch from fossil fuels to electric energy, and expand solar installation. In respect of the 5,024,265,724 yen of the estimated next proceeds that pertain to the Share Acquisition Rights, the funds are scheduled to be allocated mainly to (A) capital expenditure to increase production of ceramic balls, steel balls, and medical parts, (B) capital expenditure to supply high quality products, and (D) capital expenditure to improve thermal efficiency, switch from fossil fuels to electric energy, and expand solar installation.
This press release has been prepared for the purpose of publicly announcing the issuance by the Company of share acquisition rights and convertible bonds with share acquisition rights by way of third-party allotment, and not for the purpose of soliciting investment or engaging in any other similar activities.
The forecasts, estimations, prospects and other information pertaining to future outcomes included in this press release are based on the information available to the Company as of today and certain conditions or assumptions, and the actual operating results, etc. may differ significantly from the information pertaining to future outcomes included in this press release due to domestic and foreign financial conditions, foreign exchange trends, or other risk factors.
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Tsubaki Nakashima Co. Ltd. published this content on 18 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 October 2023 07:11:36 UTC.