Osaka Titanium Technologies is selling up to 8.05 million new shares to help pay for a ¥39.0bn expansion of its sponge-titanium plant in Amagasaki, a bet that aircraft makers will keep needing metal that used to come from Russia.
The Tokyo Prime-listed producer (ticker 5726) told the Kanto Local Finance Bureau on August 25 that a general offering of 7,000,000 shares, expected to raise roughly ¥19.2bn before costs, will run alongside an over-allotment sale of up to 1,050,000 shares (about ¥3.0bn) and a linked third-party allotment of the same size to lead underwriter Nomura Securities, worth about ¥2.88bn. Combined net proceeds are capped at ¥21,979,704,500, or roughly ¥22.0bn. Pricing will be fixed on a single day between September 1 and 4, with delivery from around September 10.
The underwriting syndicate splits the general offering three ways: Nomura Securities and Daiwa Securities each take 3,150,000 shares, with SMBC Nikko Securities handling the remaining 700,000. The eventual offer price will land at 90% to 100% of Osaka Titanium's closing share price on whichever pricing day is chosen.
Almost all of the money is earmarked for one project: a sponge-titanium production line at the Amagasaki plant, part of a ¥39.0bn investment programme approved in September 2024 to lift annual capacity 25%, to 50,000 tonnes, by the year to March 2028. Any leftover cash goes to debt repayment by the end of 2027.
The company's pitch rests on a specific supply-chain shift. Osaka Titanium says the war in Ukraine triggered a reshuffle of sponge-titanium sourcing for jet engines and airframes, with buyers substituting away from Russian material even as the aircraft supply chain works through a short-term inventory adjustment. Aircraft manufacturers' own production-increase plans, the company argues, will keep demand ahead of existing capacity over the medium term.
Tokyo has already put money behind that argument. The expansion was certified in August 2024 under Japan's Economic Security Promotion Act as a programme to secure a "specified critical material," a designation carrying a subsidy of up to roughly ¥8.0bn from the trade ministry. Osaka Titanium says it has already received part of that subsidy and applied it to the same equipment. The equity raise fills the gap between a state-backed capacity plan and the ¥39.0bn bill for building it.
| Item | Detail |
|---|---|
| General public offering | 7,000,000 new shares, ~¥19.2bn gross |
| Over-allotment offering | Up to 1,050,000 shares, ~¥3.0bn (contingent on demand) |
| Third-party allotment to Nomura | Up to 1,050,000 shares, ~¥2.88bn (linked to over-allotment take-up) |
| Combined net proceeds cap | ¥21,979,704,500 (~¥22.0bn) |
| Use of proceeds | Part of a ¥39.0bn Amagasaki plant expansion; remainder to debt repayment by end of 2027 |
| Capacity target | +25% sponge titanium capacity, to 50,000 tonnes/year, by the year to March 2028 |
| Economic security subsidy | Up to ~¥8.0bn, certified August 2024; partly already received |
| Lead underwriters | Nomura (3,150,000 shares), Daiwa (3,150,000 shares), SMBC Nikko (700,000 shares) |
| Shareholder lock-up | Kobe Steel, Nippon Steel and Sumitomo Corp barred from selling for 90 days post-settlement |
None of this comes free for existing shareholders. Shares outstanding rise from 36,800,000 to as many as 44,850,000 if Nomura takes up its full third-party allotment, an increase of roughly 22%. Three long-standing corporate shareholders, Kobe Steel, Nippon Steel and Sumitomo Corporation, have agreed not to sell any Osaka Titanium stock for 90 days after settlement without Nomura's consent, a lock-up that removes one source of selling pressure while the new shares find a market.
The filing does not name specific aircraft manufacturers or disclose binding purchase commitments tied to the expanded capacity; the case for the investment rests on the company's own reading of demand trends rather than contracted volumes. What is fixed is the calendar: pricing by September 4, the third-party allotment payment on September 29, and completion of the Amagasaki expansion by the year to March 2028.