Nippon Sheet Glass Company (5202) investor relations material

Strategic transaction overview

• Announced a fundamental restructuring with a ¥165 billion investment from Apollo Funds via a third-party allotment of new shares, leading to privatization and delisting.

• Shareholders to receive ¥500 per share, an 11.1% premium to the TPA price and 23.5% above the prior market close.

• Major financial institutions will execute a quasi debt-equity swap (Quasi-DES) of ¥140 billion, significantly reducing leverage.

• Transaction includes refinancing and repayment of ¥189 billion in UK subsidiary borrowings.

• The process involves AGM approval, regulatory clearance, and a share consolidation to complete privatization.

Rationale and necessity

• Persistent declining profitability due to European economic stagnation, rising raw material costs, and US tariffs, resulting in a ¥37 billion cumulative loss over three years.

• Excessive leverage with total debt exceeding ¥570 billion, creating a heavy interest burden and limiting operational flexibility.

• Internal restructuring alone deemed insufficient and too slow to address urgent financial and operational challenges.

• Transaction enables immediate capital strengthening and positions the group for sustainable growth.

Financial targets and performance

• 2030 Vision targets include operating profit of ¥64 billion, ROS of 7%, and equity ratio of 15%, but these remain difficult to achieve under current conditions.

• Recent years marked by fluctuating performance, high debt, and net losses, with FY2025 net income at -¥138 million.

• Borrowings increased post-2019, partly due to yen depreciation, highlighting the need for deleveraging.