Shareholders’ value ignored by the managements
Meaningless equity financingKyokuto carried out a share issue at market price in September 2015 and only 1,233 mil capital was increased while it led to 21% of dilution.
Reviewing 15 years’ Kyokuto’s equity capital, the percentage of such share issue was apparently small.
Change of Kyokuto’s equity capital
（Source：QUICK ASTRA MANAGER）
Kyokuto announced that all the fund gained by such share issue was appropriated to the repayment of interest-bearing debt in order to strengthen its financial basis. At that time, Kyokuto’s interest-bearing debt was increased temporarily for the acquisition of Eto which became its consolidated subsidiary.
However, the change of its net-cash (***) shows that there was slight impact occurred by such share issue. It is doubtful that such share issue which led to 21% of dilution was truly needed.
***The total amount of cash and estimated proceeds which will be gained by disposition of securities after deduction of interest-bearing debt
Change of Kyokuto’s Net-cash and interest-bearing debt
（Source：QUICK ASTRA MANAGER、Company release on 18/9/2015）
Medium-term management plan
Kyokuto released a 3 years management plan called KBK2016 ending FY 2018.
However, Kyokuto’s missed its targets in FY2018
（Source：FY2018Q2 presentation,Strategic Capital）
At the result presentation held in November 2018, The comment of CEO reviewing FY2017 and FY2018 was only “it is regrettable that we cannot achieve our target”.
Managements should understand that they are responsible for the plan, and explain to the shareholders the detailed reason and background why they failed to achieve the targets.