Mazda is seeking to raise more than 160 billion yen ($1.87 billion) as is fights to emerge from financial hardship and secure its future as a strong and competitive global automotive manufacturer.
The announcement follows an admission from Mazda CEO Takashi Yamanouchi last week, who said he was “considering every option” to generate more capital for the company, which is staring down the barrel of its fourth consecutive annual loss and its worst financial result in 11 years.
Under its new ‘Structural Reform Plan’, Mazda plans to launch eight new vehicles based on its SkyActiv technology, beginning with the Mazda CX-5, and has a goal of expanding the percentage of SkyActiv-equipped vehicle sales to 80 per cent within the next four years.
A significant part of Mazda returning to profitability relies on achieving a healthier cost structure in the face of the strong yen. It plans to increase production outside of Japan to 50 per cent by March 2016, focusing on vehicle production in Mexico, SkyActiv engine production in China, and local production in Russia and Southeast Asia. Unspecific “restructuring measures” could see production shifted out of North America and Europe to Japan and other regions.
As suggested by Yamanouchi, Mazda will also “actively pursue” global alliances, with agreements potentially involving the sale of SkyActiv technologies.
Trillions of shares will be on the table as Mazda seeks to raise money from the public offering of new shares and through third-party allotment of shares.
Mazda will invest 40 billion yen ($469 million) in construction of vehicle and engine assembly factories in Mexico, Russia and Southeast Asia.
Thirty billion yen ($351 million) will be channelled into Japanese manufacturing facility investments for environmental and safety technology under the brand’s SkyActiv strategy.
The final 92.8 billion yen ($1.09 billion) has been earmarked for research and development of next-generation environmental and safety technologies, focusing on expanding into electric vehicle technology as well as improving internal combustion systems.
Mazda will also take a subordinated loan of 70 billion yen ($820 million) as it seeks to repay existing interest-bearing debts, with a portion of the funds to be invested into emerging countries. Borrowed from six banks, the loan has a due date of July 20, 2072.
The financial strategy outlined above is to be completed between April 1, 2012 and March 31, 2015.