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Toray Industries, Inc - Notice regarding the Issuance of Zero Coupon Convertible Bonds due 2019 and 2021

May 26, 2014

ENP Newswire - 26 May 2014

Release date- 23052014 - Toray Industries, Inc. (headquarters: Chuo-ku, Tokyo; President: Akihiro Nikkaku; hereinafter referred to as the 'Company') hereby announces that its Board of Directors resolved at the meeting held on May 22, 2014 to issue Zero Coupon Convertible Bonds due 2019 (bonds with stock acquisition rights (tenkanshasaigata shinkabu yoyakuken-tsuki shasai)) and Zero Coupon Convertible Bonds due 2021 (bonds with stock acquisition rights (tenkanshasaigata shinkabu yoyakuken-tsuki shasai)) (collectively, the 'Bonds with Stock Acquisition Rights') in the aggregate amount of JPY100 billion (JPY50 billion for each series):

Background of the Issuance of the Bonds with Stock Acquisition Rights

In February 2011, the Group formulated 'AP-Growth TORAY 2020', a long-term corporate vision covering the period to around 2020 and 'Project AP-G 2013', a medium-term management program covering the three fiscal years from 2011 through 2013.

Under the long-term corporate vision 'AP-Growth TORAY 2020' the Group aims to become a corporate group that 'continually expands revenues and profits', 'plays an active role in contributing to social development and environmental stewardship' and 'offers high values to all stakeholders', through further implementation of global business expansion and focus on expansion of Green Innovation Businesses. The Group aims to achieve JPY3 trillion in net sales and JPY300 billion in operating income by around 2020.

Under the medium-term management program 'Project AP-G 2013', as the first stage of 'AP-Growth TORAY 2020', the Group has comprehensively and proactively focused its efforts on the implementation of growth strategies, as well as strengthening its corporate structure, in a significantly changing business environment both in and outside Japan. Furthermore, the Group has promoted investment aimed at global expansion in various business areas and also have made steady progress in R&D that may lead to significant new products and new technologies in the future.

In February 2014, the Group formulated a new medium-term management program 'Project AP-G 2016' covering the three fiscal years from 2014 through 2016. It succeeds the proactive management strategy of 'Project AP-G 2013', evolves further the Group's focus on growth strategies and the strengthening of its corporate structure, and enables business expansion.

The Group plans to make a capital investment of approximately JPY400 billion in the three fiscal years from 2014 and an investment of approximately JPY180 billion in R&D under 'Project AP-G 2016'. The Company has decided to issue the Bonds with Stock Acquisition Rights in order to meet related funding requirements in the foreseeable future.

With the belief that the materials, which form the base of all products, have the power to substantively change society, the Group continuously seeks to achieve world-leading innovations in technology, and aims to develop and commercialize advanced technologies and new materials. The Group also aims to achieve sustainable growth by giving priority to operational competency (genba-ryoku) in all fields of its corporate activity and by overcoming issues in such fields through in-depth understanding and analysis of current circumstances. The Group will continue to work toward the realization of the Group's corporate philosophy of 'contributing to society through the creation of new value with innovative ideas, technologies and products'.

Use of Proceeds

The net proceeds from the issue of the Bonds with Stock Acquisition Rights are expected to be used primarily as follows:

(i) approximately JPY50 billion by the end of March 2015, for the Group's capital expenditure including in respect of carbon fiber and prepreg (sheet consisting of resinimpregnated carbon fiber) facilities in Japan and the United States, facilities for films for IT-related products in Japan, and PPS (polyphenylene sulphide) resin facilities in South Korea;

(ii) approximately JPY30 billion by the end of March 2015, for R&D expenses, principally in respect of Green Innovation Businesses and Life Innovation Businesses, which the Group considers to be its growth business fields; and

(iii) approximately JPY20 billion by the end of July 2014, as funding for the repurchase of its own shares by the Company with a view to enabling the Company to implement flexible capital policies that meet the changes in the business environment.

To the extent such repurchase takes place prior to the closing date in respect of the Bonds with Stock Acquisition Rights, the Company intends to fund such repurchase through the issuance of commercial paper, and to apply the amount referred to above in respect of the proceeds of the offering of the Bonds with Stock Acquisition Rights to repayment of such commercial paper. As the Company will repurchase its own shares taking into consideration, among other things, market conditions, the aggregate amount of the repurchase may not reach the amount referred to above, in which case, any balance will be applied towards repayment of interest-bearing liabilities.

This announcement is intended as general information regarding the issuance of convertible bonds by Toray Industries, Inc. (the 'Company'). This announcement does not constitute an offer of, or the solicitation of an offer to buy or subscribe for the Bonds or the shares of common stock of the Company in any jurisdiction in which such offer or solicitation is unlawful. In particular, the Bonds and the shares of common stock of the Company issuable upon exercise of, or upon acquisition by the Company of, the Stock Acquisition Rights (together, the 'Securities') have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the 'Securities Act') and, subject to certain exceptions, may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S of the Securities Act ('Regulation S')). The Securities may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. No public offering of the Securities will be made in the United States.

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Source: ENP Newswire

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