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Ty’s GT Capital to invest up to $200 million in Japan’s Toyota

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The logo of Japan's Toyota Motor Corp. is seen in a showroom in Tokyo on January 6, 2017. — AFP

By Arra B. Francia, Reporter

GT Capital Holdings, Inc. is making its first offshore investment, as it buys up to ¥22.2 billion (around $200 million or P10.7 billion) worth of shares in Japanese auto giant Toyota Motor Corp.

In a disclosure to the stock exchange on Thursday, the holding firm of tycoon George S.K. Ty said it will acquire the Toyota shares on the Tokyo Stock Exchange based on prevailing rates on the date of purchase. It took out a Japanese yen-denominated loan to fund the purchase of shares, which is now ongoing.

GT Capital has a long-standing partnership with Toyota in the country. The two companies own Toyota Motor Philippines (TMP), where the Japanese firm has a 49% stake.

GT Capital Head of Investor Relations Jose B. Crisol, Jr. said the conglomerate took into account the opportunities and positive outlook for Toyota when deciding to make the investment.

“It’s opportunistic because Toyota Japan recently announced the share buyback program so we feel it’s a timely opportunity to take a position in that because numbers show that Toyota Japan is a very good investment in terms of share price valuation, P/E (price-to-earnings) and price-to-book are all very attractive,” Mr. Crisol said in a phone interview on Thursday.

He noted there is a consensus among key research reports that there will be some price appreciation on the stock, in addition to the amount of dividend yields.

Toyota is the fifth largest company in the world in terms of revenues. In its fiscal year ending March 2018, the auto giant reported that it sold 8.96 million vehicles in the world, translating to net revenues of ¥29.38 trillion.

Mr. Crisol added the listed conglomerate would like to participate in Toyota’s current initiatives, given that it has also been partners in TMP for more than three decades.

“It’s strategic because Toyota has a global shift in initiative from simple vehicle sales to what they call mobility. So it’s a more comprehensive transportation initiative and we want to participate in that, we want to become stronger strategic partners. We want to participate in their evolution,” he said.

Asked whether there are ongoing discussions to further increase GT Capital’s stake in Toyota beyond purchasing from the open market, Mr. Crisol said there are none at the moment.

Once the investment is complete, Mr. Crisol said GT Capital’s ownership in Toyota will be minimal at less than 0.1%. Toyota is valued at $3.2 billion.

Aside from the automotive industry, GT Capital also has core interests in banking, property, infrastructure, and insurance.

GT Capital saw a 29% rise in core net income to P15 billion last year from P11.7 billion in 2016, on the back of a 19% increase in consolidated revenues to P239.8 billion.

In 2017, TMP’s net income jumped 11% to P13.4 billion, as sales went up 16% to 183,908 units.

Shares in GT Capital jumped 1.69% or P15 to close at P900 each at the stock exchange on Thursday.





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