Toshiba Corp. plans to issue some 400 billion yen in corporate bonds by the end of the year to pay for its acquisition of U.S.-based Westinghouse Electric Co. and other key investments, a Toshiba executive said Wednesday.
The issue is among the largest by a Japanese company outside the finance, utility or public infrastructure sectors.
Under the plan, Toshiba aims to raise long-term capital to invest in promising projects while interest rates remain low, said the executive.
Toshiba’s hopes to bolster its market share in various businesses by focusing investment on nuclear power generation, in addition to flash memory devices for mobile phones and other devices, as well as a next-generation TV display called a surface-conduction electron-emitter display television, or SED TV.
Toshiba expects to recoup the cost of buying the Pennsylvania-based power plant builder within 17 years. Nuclear power generation is a long-term business.
Toshiba is considering issuing corporate bonds with different maturities — three, six and 10 years, for example — in a lot worth tens of billions of yen.
Of the $5.4 billion acquisition cost for Westinghouse, Toshiba said Tuesday it invested about $4.2 billion, or about 496 billion yen to purchase a 77 percent stake. The remaining 23 percent is owned by Toshiba’s two partners, Shaw Group Inc. of the U.S. and Ishikawajima-Harima Heavy Industries Co.
The market has been waiting to see how Toshiba would pay for the acquisition, especially after trading house Marubeni Corp. withdrew its earlier decision to take part.
Toshiba also plans to build a new flash memory plant by the end of the year, probably in Iwate Prefecture.
The Tokyo-based company also plans to begin construction of a factory to make panels for SED TVs in Taishi, Hyogo Prefecture, before the end of the year.
Toshiba’s capital investment is expected to total 2.04 trillion yen over the three years through March 2009.
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