On December 7, Pioneer and Baring Private Equity Asia (BPEA), a global private equity firm that is one of the largest investors in Asia, agreed to the Pioneer Revitalization Plan, a 102 billion yen commitment.
The Pioneer Revitalization Plan comprises 77 billion yen of investment by BPEA in Pioneer and a cash offer to existing Pioneer shareholders of about 25 billion yen.
In the first quarter of this fiscal year, Pioneer experienced challenging financial results with cashflow declines. Our earnings report included a note acknowledging uncertainties about our going concern assumptions. As a result, we began exploring a range of measures for companywide management reforms.
It was during that process that Pioneer chose BPEA as our sponsor to assist with reforms. After deep discussions between both parties, we concluded that it would be best to take Pioneer private. This is because we recognized that to ensure business continuity and return Pioneer to growth in the medium- and long-term, it is vital to swiftly overhaul our organizational structure and review our business portfolio. We also recognized that, given the challenge of achieving near-term profitability, taking the company private represents the best option for Pioneer.
Consequently, subject to shareholder approval at an extraordinary shareholders' meeting on January 25 next year and the completion of required filings, BPEA will invest in Pioneer and take Pioneer private, making us a 100%-owned subsidiary of BPEA.
Top management was very mindful of its responsibilities when making this decision, and once the investment is in place there will be changes to the management team. My mission is to help revitalize Pioneer as quickly as possible and return the Company to a position where it can deliver products and services that delight all of our customers.
BPEA sees great potential in Pioneer's innovative technology, well-established brands and people, and shares our vision for the future of our Company.
Despite the challenging situation we face, I firmly believe that this partnership with BPEA and the investment it brings will usher in a bright new future for a revitalized Pioneer.
I would like to take this opportunity to reiterate my gratitude to all of Pioneer’s stakeholders for their ongoing support and encouragement.
I particularly want to thank our shareholders for their continued support and understanding amid the difficulties we have experienced in recent years.
President and CEO
Pioneer Corporation (Pioneer), the global car electronics company, and Baring Private Equity Asia (BPEA), a global private equity firm which is one of the largest alternative investors in Asia, today unveiled the Pioneer Revitalization Plan.
Pioneer Announces Issuance of New Shares through Third Party Allotment (Debt-Equity Swap and Cash Contribution) and Partial Amendments to Articles of Incorporation, Share Consolidation and Abolition of Unit Share System, and Change in Parent Company and Largest Shareholder (PDF 352 KB)
|Beginning of January 2019||Dispatch of convocation notice of Extraordinary General Meeting of Shareholders|
|Friday, January 25, 2019||Extraordinary General Meeting of Shareholders|
|Friday, March 1, 2019||Issuance of new shares under the third party allotment|
|Friday, March 1, 2019||Designation of common stock as securities to be delisted on the Tokyo Stock Exchange|
|Tuesday, March 26, 2019||Last Trading Date of shares of common stock on the Tokyo Stock Exchange|
|Wednesday, March 27, 2019||Delisting of shares of common stock on the Tokyo Stock Exchange|
|Sunday, March 31, 2019||Effective date of share consolidation|
A：Shares of Pioneer can be traded on the Tokyo Stock Exchange up to and including the business day immediately preceding the day on which shares of Pioneer are delisted (Last Trading Date). The Last Trading Date is scheduled to be March 26, 2019 at the earliest. After that, cash totaling approximately 25 billion yen (66.1 yen per share) will be paid to the shareholders of Pioneer as of the date on which the shares of Pioneer are delisted. Pioneer will announce the details once they are determined. The foregoing is subject to the approval from the shareholders at the General Meeting of Shareholders.
A：For now, you are not required to take any action. You will receive a notice before you are required to take any action with respect to your shares. Please read carefully such notice and take necessary action in accordance with your decision.
A：Currently, the schedule is planned as follows. The issuance of new shares through a third party allotment is scheduled on March 1, 2019. However, if any procedures including local competition authorities’ clearances necessary for the issuance of new shares are not completed by the aforementioned date, the date of issuance will be postponed to a later date. In such case, the schedule of processes after the issuance of new shares will also be different from the below. Pioneer will announce it once the actual schedule is fixed.
Beginning of January 2019
Dispatch of convocation notice of Extraordinary General Meeting of Shareholders
Friday, January 25, 2019
Extraordinary General Meeting of Shareholders
Friday, March 1, 2019
Issuance of new shares under the third party allotment
Friday, March 1, 2019
Designation of common stock as securities to be delisted on the Tokyo Stock Exchange
Tuesday, March 26, 2019
Last Trading Date of shares of common stock on the Tokyo Stock Exchange
Wednesday, March 27, 2019
Delisting of shares of common stock on the Tokyo Stock Exchange
Sunday, March 31, 2019
Effective date of share consolidation
A：A share consolidation is a procedure whereby a multiple number of shares are consolidated into a smaller number of shares. In the share consolidation contemplated by Pioneer, Pioneer will consolidate 450,000,000 shares into 1 share.
A：The share consolidation is implemented to make Pioneer a wholly-owned subsidiary of Wolfcrest Limited, a fund formed by Baring Private Equity Asia. Pioneer believes that it is essential to implement fundamental structure reformations in a timely manner in order to continue its business and achieve medium-to-long term growth. On the other hand, it will be difficult to implement the share consolidation without having adverse economic impacts on existing shareholders because of concerns over further deteriorating revenues and cash flow in a short term. Moreover, if the financing through the third party allotment were not realized and Pioneer could not implement fundamental structure reformation measures in a timely manner, there would be a concern that existing shareholders would be exposed to further risks through, among others, a decline in share prices due to deterioration of the business and financial conditions of Pioneer and concern over the business continuity of Pioneer. In light of the foregoing, Pioneer concluded that it would be difficult to procure the necessary funds to continue the Pioneer group’s business and realize medium-to-long term growth and to implement large-scale measures to improve management in a short period of time while maintaining its listing. Therefore, Pioneer concluded that, after paying reasonable consideration to existing shareholders of Pioneer, the implementation of business reforms together with delisting was unavoidable.
A：The number of shares equivalent to the aggregate number of fractional shares held by each shareholder will be sold with the permission of the court in accordance with applicable laws, and the proceeds of such sale will be delivered to each shareholder in proportion to the number of the fractional shares held by such shareholder. The sale price is scheduled to be set so that each shareholder will receive the amount obtained by multiplying the number of the Pioneer’s shares held by such shareholder by 66.1 yen. However, the amount actually delivered may differ in such cases as when the permission of the court is not obtained or rounding is necessary.
A：The unit share means a unit of shares for trading on stock exchanges and voting at a general meeting of shareholders. The Articles of Incorporation of Pioneer provides that the number of shares constituting one unit is 100 shares. When the share consolidation becomes effective, 450,000,000 shares of Pioneer will be consolidated into 1 share, and accordingly, the total number of issued shares of Pioneer will be reduced to 4 shares, which will eliminate the need for unit share system. Therefore, the relevant provisions in the Articles of Incorporation are scheduled to be abolished.
A：If the share consolidation is approved at the Extraordinary General Meeting of Shareholders and becomes effective, Wolfcrest Limited will become the sole shareholder of Pioneer and the shareholders of Pioneer other than Wolfcrest Limited will, in exchange for the delivery of cash totaling approximately 25 billion yen (66.1 yen per share) to them, no longer be shareholders of Pioneer. However, the amount actually delivered may differ in such cases as when the permission of the court is not obtained or rounding is necessary.
A：Subject to the issuance of all of new shares through the third party allotment and obtaining clearances from the relevant authorities in each jurisdiction, the share consolidation will become effective at the end of any of the months March 2019 through July 2019. Pioneer will announce the details once they are determined.
A：The timing of the payment depends on the timing of the issuance of new shares. Pioneer will announce the schedule once it is fixed.
A：The method of receipt of the cash to be delivered upon the share consolidation depends on the method of receipts of the dividend selected by each shareholder. Pioneer will announce the details once they are determined.
A：Pioneer has sincerely discussed with several potential sponsor candidates, and with Wolfcrest, the only candidate which has proposed feasible support measures to solve Pioneer’s strained financing for the present. Pioneer tried and succeeded in raising a proposed sale price as a result of a series of negotiations and finally agreed upon the sale price of 66.1 yen per share with Wolfcrest. Therefore, Pioneer has concluded that this amount will be the best terms which Pioneer can propose to its shareholders and will provide a reasonable opportunity for the shareholders to sell Pioneer’s shares.
Moreover, Pioneer has obtained the Share Valuation Report and the Fairness Opinions from an independent third-party appraiser. In light of these report and opinions, Pioneer believes that 50 yen, which is the amount per share to be paid in for the issuance of new shares, and 66.1 yen, equivalent to a 32.2% premium thereon are reasonable prices.
Pioneer asks for the understanding of shareholders.
A：The share consolidation will be implemented for the purpose of making Wolfcrest the sole shareholder of Pioneer. When the share consolidation is approved at the Extraordinary General Meeting of Shareholders and becomes effective, the shareholders of Pioneer other than Wolfcrest will cease to be shareholders of Pioneer, in exchange for delivery of cash totaling approximately 25 billion yen (66.1 yen per share).
A：In order to take into account the interests of the existing shareholders, Pioneer has obtained the Share Valuation Report and the Fairness Opinions from an independent third-party appraiser of Pioneer and opinions from persons independent from the management of Pioneer, as well as advice from an independent law firm, in considering a series of transactions including the issuance of new shares and the share consolidation.
A：As a result of a series of transactions, including the issuance of new shares and the share consolidation, the Pioneer’s shares are scheduled to be delisted in accordance with the rules of the Tokyo Stock Exchange.
A：In such case, Pioneer’s shares will not be immediately delisted through a series of transactions, including the issuance of new shares and the share consolidation. However, Pioneer believes that it is essential to implement fundamental structure reformations in a timely manner in order to continue business and achieve medium-to-long term growth of the Pioneer group. If the financing through the issuance of new shares were not realized and Pioneer could not implement fundamental structure reformation measures in a timely manner, there would be a concern that existing shareholders would be exposed to further risks through, among others, a decline in share prices due to deterioration of the business and financial conditions of Pioneer and concern over the business continuity of Pioneer. Therefore, Pioneer asks that the shareholders agree to the issuance of new shares and the share consolidation at the Extraordinary General Meeting of Shareholders.