The Japanese automaker will sell up to 500 billion yen (~$4.2 billion USD) in new unlisted shares, known as “Model AA,” that will command at least 20 percent higher prices than the listed stock, according to Bloomberg.
The program is said to be aimed at medium- to long-term investors, with shares restricted from trading for a period of five years. The potential upside resides in higher dividends — growing to 2.5 percent after five years — and the ability to eventually convert the shares into common stock or sell the holdings back at the original price.
The capital will help the automaker pay for long-term development projects, particularly for hybrid technology and fuel-cell vehicles. The hydrogen-powered Mirai, hand assembled at the former LFA Works factory, is believed to bring a significant loss for each unit sold, despite a $57,500 price tag in the US.
The report suggests Toyota’s program is also aimed at promoting stability, in contrast to the volatility that sometimes results from a large number of trades based solely on short-term price fluctuations.
Pending a final approval of the plan at a shareholder meeting in June, the company will initially test the waters by selling 50 million shares in Japan.