ENDO Lighting Corporation [6932.T]
TOKYO, May 25 (Pulse News Wire) – ENDO Lighting Corporation (6932.T) rejected a shareholder proposal for a share buyback at its upcoming annual general meeting scheduled for June 25. The board of directors opposed the proposal, which called for the repurchase of approximately 1.5% of outstanding shares.
The company believes such a move could hinder its ongoing growth initiatives and long-term shareholder value. Last October, ENDO entered a strategic partnership with Advantage Partners and raised funds through the issuance of convertible bonds to support expansion plans. The board emphasized maintaining a balanced approach towards capital allocation, focusing on investments in production equipment, research and development, digital transformation, and mergers and acquisitions. They also highlighted their commitment to increasing dividend payouts based on a policy targeting a consolidated payout ratio of 30%.
In contrast, the proposing shareholder argued that maintaining a higher equity ratio would enhance financial stability and align with corporate governance standards. However, ENDO’s management dismissed this view, citing the potential negative impact on weighted average cost of capital (WACC) and the need to prioritize sustainable growth strategies. The company's cash reserves have grown significantly over the past decade, reaching nearly three times the level seen in March 2016, despite limited revenue growth. ENDO contends that reducing excess liquidity is crucial for efficient asset utilization and risk management.
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