Toyota defends controversial share sale
Tokyo
Toyota yesterday defended a controversial new share sale that critics, led by overseas institutional investors, derided as a bid to tame shareholder activism.
The world's biggest automaker said 75 per cent of shareholders voted in favour of the plan on Tuesday that will see it sell up to 50 million new shares, which must be held for five years and will not be publicly traded.
Largely restricted to Japanese investors, the new "Model AA" stocks carry voting rights and will be priced between 26-30pc above the value of its common shares during several trading days in July.
The Tokyo-listed stock slipped 0.68pc to 8,338 yen ($68) by the break Wednesday.
Dividends paid on the new shares will rise from 0.5pc to 2.5pc by the end of the five-year holding period when investors can convert them to common shares or Toyota would repurchase them, it said.
The firm said the move was aimed at luring long-term investors, but critics said it ran afoul of Japan's new corporate governance code, adopted earlier this month.
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