Compiled from Kyodo, Jiji Press NEW YORK -- 7-Eleven Inc. announced Wednesday that majority owner IYG Holding Co., a wholly owned subsidiary of Ito-Yokado Co., will invest $540 million in the U.S. convenience store giant in exchange for 113.7 million primary common stock shares.
Following completion of the transaction, which is expected to be in mid-March, IYGHC's ownership of 7-Eleven stock, excluding convertible debts, will increase from 65 percent to 72 percent. , it said.
"This transaction will allow us to significantly reduce our debt, lower interest expense and is the first step toward improving our capital structure," said Clark Matthews, president and chief executive officer of 7-Eleven.
"The resulting financial flexibility will allow us to increase the number of new stores opened annually by as much as 25 percent over the next several years and to facilitate a national roll-out of our e-commerce strategy." he said.
Upon the announcement, Moody's Investors Service Inc. said it is reviewing its Ba1 rating assigned to long-term debts issued by 7-Eleven for a possible upgrade.
Moody's said it will focus on 7-Eleven's capital investment plans and effects of its management strategy on its debts in assessing its rating.
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