Notice of Issuance of Unsecured Convertible Bond-Type Bonds with Share Acquisition Rights through Third-Party Allotment

Overview

JALCO Holdings announces the issuance of bonds with share acquisition rights through third-party allotment, totaling 5,000 million JPY. The allocations are to GP Fund ① and GP Fund ②, with funds intended for long-term stable rental income property acquisitions and the development/obtaining of system storage batteries. The bonds are convertible starting from the issuance date, with an initial conversion price of 327 JPY and provisions for downward adjustment and a floor at 85%. Although issuance may cause some dilution, the company prioritizes medium- to long-term growth investments.

Details of Capital Policy and Risks

The conversion price adjustment clause allows for downward revision every six months after September 2027 based on the average closing price of the preceding month, with a minimum of 85% of the initial conversion price. While the conversion period is long-term, the design aims to avoid immediate dilution. Fundraising benefits include securing capital in one go and the potential to transition to equity capital. Risks include debt-like characteristics of the bonds, dilution risk, and future repayment obligations.