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Yamaha Motor to raise up to $812 mln in share sale

Japanese motorcycle maker Yamaha Motor Co said it will raise up to ¥76.1 billion ($812 million) in a share sale to finance the development of fuel-efficient engines and low-cost bikes for emerging markets.

Hit by a demand slump in the United States and Europe, as well as restructuring costs, Yamaha booked a hefty net loss of ¥216 billion in 2009 and aims to break even this year.

The offering will mark the largest equity-based fund raising by a company in the auto sector since Mazda Motor's deal to procure ¥98 billion in October last year.

Players in the auto market have entered into a costly race to cope with the demand plunge in the United States, the world's largest market, as well as a shift in customer appetite towards environmentally-friendly products, including hybrid and electric vehicles.

Yamaha said it will develop more fuel-efficient engines for motorcycles and boats to improve the competitiveness of its products, as well as electric motorcycles and motor-assisted bicycles, for which demand is seen rising.

This is the first equity fund-raising by Yamaha since it raised ¥40.3 billion in May 2007.

The company said in a statement on Friday that it would issue up to 63.25 million shares, including a greenshoe option of 8.25 million shares. The public offering could increase its total number of shares outstanding by 22%.

Nomura Securities, a unit of Nomura Holdings, will manage the sale, Yamaha said.

The firm said it would spend a total of ¥202 billion on research and development in the three years to 2012 to help achieve growth in emerging and ASEAN countries and to accelerate the development of environmentally-friendly engines.

It spent ¥62 billion on research and development in 2009 and has budgeted ¥60 billion for the current year.

Under its recently compiled mid-term business plan, the company aims to raise its annual revenues to ¥1.4 trillion by 2012 from ¥1.15 trillion in 2009, although that would still be short of the ¥1.6 trillion achieved in 2008. (Reuters)