IPS, Inc. has set the price of its new-share sale at ¥3,346 per share, and the result lowers the money it can raise for its Wakayama submarine cable project. Net proceeds are capped at ¥4.58bn, against ¥5.49bn in the filing before pricing, a figure computed from the September 25 closing price. Earlier Tokyo Brief coverage
What is committed
The public offering covers 1,263,500 new shares at a payment amount of ¥3,173.50 each, or ¥4.01bn in total. After about ¥26mn of expenses, net proceeds are ¥3.98bn. The price is a 3.01% discount to the ¥3,450 reference price on October 14. Subscription runs from October 15 to 16, with payment due October 20.
Mizuho Securities underwrites the offering in full and receives no fee. It keeps the ¥172.50-per-share gap between the offer price and the payment amount.
What is conditional
The remaining ¥597.4mn is a ceiling. IPS has authorised up to 189,500 new shares for Mizuho at ¥3,173.50, payable November 18 after an application on November 17. Shares Mizuho does not apply for lapse. Mizuho may also buy IPS shares on the Tokyo Stock Exchange from October 17 to November 13 to return the shares it is to borrow.
The over-allotment sale of the same 189,500 borrowed shares, at ¥3,346 for ¥634.1mn, is Mizuho's sale of shareholder stock. It is not funding for IPS.
Where the money goes
IPS says all proceeds will go to the Wakayama project, a branch submarine cable and its landing station, by the year ending March 2030. Its capex table puts the combined cost at ¥23bn, including the investment of a prospective partner in the landing station. The table schedules work to start in fiscal 2026 and finish in fiscal 2029.
IPS is still weighing joint work with prospective partners and the use of various schemes. Any surplus would go to expanding international capacity in the Philippines. Until the cash is needed, IPS plans to hold it in safe financial instruments.