* Toyota's biggest buyback in more than a decade
* To allocate half of shares for foundation on autos and
* Half of shares to be cancelled as Japan companies aim to
(Adds details on buyback, company and analyst comment)
By Yoko Kubota
TOKYO, March 26 Toyota Motor Corp will
buy back up to 1.89 percent of its shares worth up to 360
billion yen ($3.5 billion) in what would be the automaker's
biggest buyback in more than a decade.
Toyota, expecting record profits for the financial year
ending March 31, is returning cash to shareholders and boosting
its return on equity after its cash pile expanded to 1.8
trillion yen as of end-December.
The world's biggest automaker said on Wednesday it would
sell 30 million shares to Japan Trustee Services Bank for a
token sum of 1 yen per share, with the dividends used to fund a
new foundation to support the auto industry's development and
The remaining 30 million shares will be cancelled.
"We want to reward our shareholders through this buyback and
cancellation," Toyota spokesman Ryo Sakai said.
Toyota, helped by a weaker yen that boosts the profitability
of its exports, has forecast a record 1.9 trillion yen net
profit for the year to end-March.
The buyback is the first for the company in five years and
its biggest since 2003, when it paid around 390 billion yen. It
follows similar moves by several Japanese companies, including
Canon Inc, to boost return-on-equity, an indicator that
is lower among Japanese corporations than the global average.
Some analysts said Toyota should have invested the extra
cash to expand sales and production.
"At a time when it's no longer special for the biggest car
makers to sell around 10 million vehicles a year, we want to see
how Toyota will make investments to take charge in the
industry," said Satoru Takada, senior analyst at industry
research firm TIW in Tokyo.
Toyota and its group companies aim to sell 10.32 million
vehicles in 2014, up 4 percent from last year. It has said it
does not plan to build any new factories over the next two years
after a rapid expansion prior to the 2008 financial crisis led
to huge losses.
The share buyback plan is subject to approval by an annual
general shareholders' meeting in June, the company said.
The shares will be purchased after the shareholders' meeting
and no later than March 26, 2015. The stock closed up 1.1
percent on Tuesday at 5,621 yen, prior to the buyback
($1 = 102.3200 Japanese Yen)
(Editing by Edmund Klamann and Miral Fahmy)