TOKYO — Kawasaki Heavy Industries is finalizing plans to raise about 200 billion yen ($1.23 billion) through a combination of new share issuance and convertible bonds to finance capital spending in strategic growth sectors, two people familiar with the matter said.
The Japanese industrial conglomerate could approve the fundraising as early as this week, the sources said. The securities are expected to be offered primarily to overseas institutional investors.
Reuters reported the plans for the first time. Kawasaki Heavy did not immediately respond to a request for comment. The sources requested anonymity because the discussions are confidential.
Convertible bonds, which can later be exchanged for shares at a predetermined price while limiting immediate shareholder dilution, have become increasingly attractive to Japanese companies as rising interest rates reshape financing strategies.
Kawasaki Heavy has been expanding investment across several high-priority businesses, including aircraft engines, gas turbines, semiconductor manufacturing robots and hydrogen infrastructure, while also strengthening its position in Japan’s growing defense sector.
The investment push aligns with Prime Minister Sanae Takaichi’s strategy to generate more than 370 trillion yen in investment through fiscal 2040 across 17 strategic industries, including artificial intelligence and semiconductor technology.
Kawasaki Heavy President and CEO Yasuhiko Hashimoto has previously said the government’s industrial policy presents significant opportunities for the company.
The manufacturer has recently deepened its presence in advanced technology through partnerships with companies including Nvidia to integrate artificial intelligence into robotics systems. Last month, it announced plans to establish a development hub in Silicon Valley.
The company also signed an agreement with Airbus last week to cooperate on the possible development of a Japanese version of the Eurodrone military unmanned aircraft.
As one of Japan’s leading heavy manufacturers, Kawasaki Heavy produces aircraft, submarines and missile systems and is widely expected to benefit from Tokyo’s expanding defense spending amid heightened security challenges across the Indo-Pacific region.
