Bloomberg News

Daiwa House to Raise Up to 137.9 Billion Yen Through Share Sale

July 05, 2013

Daiwa House Industry Co. (1925), Japan’s biggest homebuilder, plans to raise as much as 137.9 billion yen ($1.37 billion) in Asia’s biggest share sale this year by a property company.

The proceeds will go toward 650 billion yen the Osaka-based company plans to spend over the next three years on building or redevelopments, including warehouses, mergers and acquisitions, and capital spending, according to a statement through the Tokyo Stock Exchange.

Japan’s construction industry is recovering after the March 2011 earthquake aided by the government’s pledge to spend 3.8 trillion yen for rebuilding and disaster prevention on top of 19 trillion yen already budgeted. Daiwa House managed to achieve its three-year sales target of 2 trillion yen in the fiscal year ended March 31, a year earlier than it had planned, the company said in the statement.

“The company will be able to curb a rise in debt, given the proceeds from the public offering, ample cash flow and expected recoveries from property sales,” Hirohide Kinoshita, a Tokyo-based credit analyst at Rating & Investment Information Inc., said in a note after the announcement. “Because of strong appetite for business expansion, however, improvement in the balance between risk assets or debt and equity capital may stall.”

The sale will be the biggest additional offering in Asia by a company in the real estate industry this year, followed by Global Logistic Properties Ltd. (GLP)’s $1.25 billion sale, according to data compiled by Bloomberg.

Daiwa House shares declined 1 percent to 1,965 yen at the close of trading in Tokyo before the announcement. The stock has gained 33 percent this year, outperforming the 29 percent advance by the 94-member Topix Construction Index.

Brokerages including Nomura Holdings Inc. (8604) and Morgan Stanley (MS:US) were appointed for the sales, Daiwa House said.

To contact the reporters on this story: Tomoko Yamazaki in Singapore at tyamazaki@bloomberg.net; Katsuyo Kuwako in Tokyo at kkuwako@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • MS
    (Morgan Stanley)
    • $31.41 USD
    • -0.27
    • -0.86%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus