Source disclosure: January 28, 2026
Chiyoda Corporation [6366.T]
TOKYO, Jan 28 (Pulse News Wire) -- Chiyoda Corporation (6366.T), led by President Hiromichi Ota, announced today that it has reached an agreement with Mitsubishi Corporation regarding the early redemption of its Class A preferred shares. The company also decided to propose amendments to its articles of incorporation at its upcoming 98th regular shareholders' meeting scheduled for June this year.
The background behind this move stems from Chiyoda's ongoing efforts since 2019 to stabilize its finances after suffering significant losses on large projects initiated before its restructuring plan. Despite achieving some success under its current medium-term business plan, known as Business Plan 2025, the company still faces challenges related to the repayment of these preferred shares. To address this issue, Chiyoda has agreed with Mitsubishi Corporation to modify the conditions of the Class A preferred shares over the next two years until June 2028, aiming for their full redemption. This will involve fixing the redemption price per share at 436 yen through June 2029 instead of linking it to market value. Additionally, the conversion rights into common stock will be suspended until July 2029, allowing for smoother cash redemptions without concerns about conversions.
Under the new terms, the dividend rate will remain at 3% annually until June 2028 but increase to 12% thereafter. However, Chiyoda plans to make maximum efforts to fully redeem all Class A preferred shares by June 2028 based on annual distributable profits. Following the full redemption, the company aims to resume dividends to ordinary shareholders and pursue further growth strategies. Chiyoda expects to implement the first phase of the redemption within the limits of distributable earnings, with details to be disclosed upon determination.
Chiyoda is concurrently negotiating with key stakeholders such as Mitsubishi UFJ Financial Group Bank for refinancing arrangements and intends to disclose any progress once finalized. These measures align with Chiyoda’s broader strategy outlined in its latest capital policy document and future strategic roadmap provided as supplementary materials. The total estimated cost of the redemption process is approximately ¥90 billion, including unpaid dividends and future interest payments up to June 2028.
This agreement does not impact Chiyoda's current fiscal year performance ending March 2026. Furthermore, Chiyoda ensured transparency and fairness throughout the negotiation process involving independent directors and external experts, confirming that the deal benefits both parties while safeguarding shareholder interests. The revised articles of incorporation will be presented for approval at the upcoming shareholders’ meeting, with implementation dates to be confirmed later.
AI-translated content. 🟡 Confidence: Standard See terms • Original filing