Mitsubishi Materials' board resolved on July 8 to issue two tranches of Euro-yen convertible bonds, due 2030 and 2032, with net proceeds of about ¥70bn earmarked for the company's shift toward a resource-recycling business. The money is due to be spent by the end of March 2029 on converting smelting capacity to handle secondary raw materials and expanding tungsten recycling, part of a mid-term strategy running through 2028 that the company frames as building "a company that creates the future through the resource-recycling business".
The 2030 tranche totals ¥35bn, carries no coupon, and will be issued on July 24, 2026 at 102.5% of face value, maturing on July 24, 2030. Both tranches are being sold only to investors in Europe and Asia, excluding the United States, with Morgan Stanley & Co. International plc acting as sole bookrunner. The initial conversion price had not been set as of the July 8 announcement.
The bonds carry a restriction meant to limit early dilution: holders cannot exercise their warrants unless Mitsubishi Materials' stock trades above 150% of the conversion price for 20 consecutive trading days in specified windows before mid-2029, or above 130% after that, with broader exercise windows opening only in the run-up to each bond's maturity.
A separate disclosure complicates the picture. J-Link Limited told Mitsubishi Materials it had decided to buy the new convertible bonds and split them into two pieces: a credit portion sold to credit investors and a warrant-form portion sold to other investors. J-Link says it has no plan to exercise those warrants for common shares or to vote them. But the potential voting rights attached to the bonds it plans to acquire could reach as much as 12.37% of Mitsubishi Materials' total voting rights, a figure calculated on the assumption that the initial conversion price matches the stock's July 7 closing price. That scale is large enough to trigger Japan's share-accumulation disclosure rule under the Financial Instruments and Exchange Act enforcement order. Mitsubishi Materials said it is not involved in and has no knowledge of the details of J-Link's transaction, and directed questions to Morgan Stanley MUFG Securities.
How many of the bonds J-Link actually buys, and at what price, remains undecided. The company said the purchase depends on demand from overseas investors and gave no timeline beyond the bonds' July 24 issuance.