Kobe Steel is going to raise 100.6 billion yen from the sale of shares

Kobe Steel, Ltd, Japan's third-largest steelmaker, plans to raise a whopping $ 996 million to reorganize its core operations. Most of the proceeds from the sale of shares will be used to fund the company's capital expenditures.

The funds are intended to improve the profitability of iron ore and steel operations and reform Kobe Steel's entire business, a leading company in Japan said today. The price will be finalized on Feb.19, the company said in a statement.
Currently, Kobe Steel posted data with a 6.6 percent drop to 156 yen, the largest decline since May 30 last year. The announcement of the sale of the shares came after the stock market closed at that level.

Kobe Steel, which manufactures aluminum and copper products and construction equipment, has suffered losses in the past two completed fiscal years. However, the company raised its annual operating profit forecast by 11 percent to 105 billion yen after analysts re-evaluated the emerging trends.

In addition, from July 2014, the company plans to upgrade the plate mill at the Kakogawa facility. Construction work will be completed in March 2015. The total investment will be about 4 billion yen. The company aims to increase its heavy plate sales share from its current 10 to 30 percent, and to improve the competitiveness of its metallurgical business. Kobe Steel also strives to become one of the leading suppliers of shipbuilding and construction products.