Disregarded shareholder value – Equity financing –
In September 2015, Kyokuto issued new shares at the market price, resulting in a dilution of 21% to raise only 1,233 million yen. The change in equity capital over the past 15 years shows that the impact of the share issuance is very small on the overall level.
Change in Equity Capital
（Data source：QUICK ASTRA MANAGER、Press release 9/18/2015）
Kyokuto announced that “all the funds obtained from the share issuance will be used to repay interest-bearing debt and to strengthen the financial base”. At that time, debt had temporarily increased due to the acquisition of shares in Eto, which later became a consolidated subsidiary.
However, the change in net cash (cash and securities minus interest-bearing debt) also shows the impact from the share issuance was minimal. It raises the question of whether raising capital at the cost of 21% dilution was truly needed.
Change in net cash and debt
（Data source：QUICK ASTRA MANAGER、Press release 9/18/2015）
