Mazda Motor CEO Hisakazu Imaki said on Tuesday that issuing new shares was one of many options for raising funds to increase research and development as well as other investment spending.
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“We are at a point where we have various options available to us to raise funds,” the CEO told Reuters during an interview in Tokyo.
Asked if issuing shares was one such possibility, he reportedly said: “That is one option,” while adding the company would prefer to utilise its own funds as much as possible to avoid a dilution of its shares.
The report noted that Mazda, one-third owned by Ford, said last month it planned to boost its R&D spending by 30% to JPY500bn yen ($US4.2bn) over the course of a four-year business plan ending in March 2011. It also said it would increase capital expenditure by 50% to around 400 billion yen compared with its spending over the previous four years.
At the end of September 2006, Mazda had cash and cash equivalents totalling JPY162bn yen. Imaki reportedly declined to estimate how much of the JPY900bn needed on capital expenditure and R&D over the next four years would be paid for with reserves.
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By GlobalDataWhen it unveiled its business plan last month, Mazda said it would target a “stable payout of dividends” to benefit its shareholders but stopped short of setting a specific target, Reuters said, adding that, at a planned pay-out of JPY5 per share for the business year ended 31 March, Mazda’s consolidated dividend payout ratio would be just under 10% based on the company’s net profit forecast of JPY73bn.
Imaki told Reuters Mazda intended to increase the dividend “whenever possible”, but hinted that shareholders had already benefited to some extent from a more than doubling in the stock price since he took his post in August 2003.
The report added that Mazda’s shares hit a multi-year high of JPY823 at the start of 2007 and have declined steadily (to JPY650 on Tuesday) since the company announced disappointing third-quarter results in February, coupled with an unfavourable strengthening of the yen.
