Kawasaki Heavy plans to raise $1.2 billion through new shares, CBs, sources say

Airbus SE

Today 02:30

By Miho Uranaka and Sam Nussey

    TOKYO, July 1 (Reuters) - Japan's Kawasaki Heavy Industries 7012.T is finalising plans to raise about 200 billion yen ($1.23 billion) by issuing new shares and convertible bonds to fund capital expenditure, according to two sources familiar with the matter. 
The company will decide on the issuance as soon as this week, the sources said. The shares and convertible bonds will be sold mainly to overseas institutional investors, one of the sources said. 
Reuters is reporting the plans for the first time. Kawasaki Heavy did not respond to a request for comment. The sources declined to be named as the information is not public. 
Convertible bonds, which can be converted into shares at a predetermined price but avoid immediate dilution, are becoming more popular among Japanese companies as interest rates rise.
Kawasaki Heavy is investing in areas including aircraft engines, gas turbines, robots used in chipmaking equipment and the hydrogen supply chain, as the government plans to beef up key sectors as well as the country's defences.
Prime Minister Sanae Takaichi is targeting more than 370 trillion yen in investment through fiscal 2040 across 17 strategic sectors including AI and chips — a move that Kawasaki Heavy CEO Yasuhiko Hashimoto has said offers opportunities for the company.
Kawasaki Heavy is collaborating with companies including Nvidia NVDA.O to integrate AI and robotics and last month announced a development hub in Silicon Valley. Last week, it signed an agreement with Airbus AIR.PA to cooperate on a possible Japanese variant  of the Eurodrone defence drone. 
Kawasaki Heavy makes aircraft, submarines and missiles and is also expected to benefit from Japan's military expansion amid heightened regional tensions.
       ($1 = 162.2400 yen)

(Reporting by Miho Uranaka and Sam Nussey; Additional reporting by Maki Shiraki
Editing by Chang-Ran Kim)
((sam.nussey@tr.com;))