Kawasaki Heavy Industries is planning to raise approximately ¥200 billion, or about $1.23 billion, by issuing new shares and convertible bonds, sources said this week [1, 2, 3]. The company aims to use the proceeds for capital expenditures focused on aircraft engines, gas turbines, semiconductor equipment robots, and hydrogen supply chains [1, 2, 3].
The new shares and bonds will mainly be sold to overseas institutional investors, reflecting Kawasaki's strategy to attract foreign funding [1, 2, 3]. However, the company has not made a final decision and is still weighing various capital operation plans, including these issuance options. "The company is considering various capital strategies including issuing new shares and bonds but that nothing has been decided," a Kawasaki spokesman said [2].
Reports emerged in early July that Kawasaki Heavy was finalizing plans for the ¥200 billion raise [2]. The week of August 3 was expected as the timeframe for finalizing issuance details [1, 3]. On August 5, Kawasaki's shares dropped sharply by over 7% to 8% in Tokyo trading due to investor worries about dilution from the planned issuance [2, 3].
Convertible bonds have grown popular in Japan this year amid rising interest rates, with several companies raising large funds via this method [2]. Kawasaki’s planned use of capital aligns with the Japanese government’s strategic focus on advanced technology sectors such as AI, semiconductor manufacturing, and defense projects, including the Eurodrone partnership with Airbus [2].
The company reported record high sales and profits for the fiscal year ending March 2026 and forecasted a business profit of ¥170 billion for the current fiscal year [2]. Raising new capital supports Kawasaki’s investments in key areas to sustain this growth.
Kawasaki Heavy is expected to finalize the issuance plan details very soon, likely within the current week ending August 9, 2026, according to industry sources [1, 2, 3].
