Japanese steelmaker JFE Holdings saw a significant drop in its shares on Tuesday morning following the announcement that the company’s board would be discussing a capital raising later in the day.
The shares were down 8.8% to 2,222.5 yen and had fallen by as much as 9.0% earlier.
JFE stated in a Tuesday morning announcement, in response to a report by Japanese business daily Nikkei, that it intends to raise approximately 200.0 billion yen ($1.37 billion) by selling new shares and convertible bonds to foreign investors.
According to the Nikkei report, the steelmaker plans to utilize the funds to enhance capacity for products used in electric-vehicle motors and establish an electric furnace as part of its commitment to reducing carbon emissions.
In August, JFE revised its revenue forecast for the fiscal year ending in March 2024 due to weaknesses in its overseas business. The company anticipated a 2.1% increase in revenue to Y5.380 trillion, down from the previously projected Y5.540 trillion. Additionally, it predicted that net profit would rise by 17% to Y190.00 billion.