Our Shareholder Proposals for Asanuma
Strategic Capital and our fund are shareholders of ASANUMA CORPORATION (hereinafter referred to as “Asanuma”).
We have executed our shareholders’ right to make proposals at the AGM held in the coming June as followings.
- Disclosure of WACC and its basis of calculation for more effective dialogues. ・・・・・・・Proposal.1 →We have withdrawn this proposal. Please find detail here
- Dissolution of cross shareholdings to increase financial leverage. ……… Proposal.2(#4 on the convocation notice)
- Increase of dividend to achieve 100% payout ratio. ……… Proposal.3(#5 on the convocation notice)
The challenges and our solutions are followings.
- Medium-Term Plan based on conservative cost of capital
According to Asanuma’s Medium-Term Plan, Asanuma recognises its cost of capital as 5% and uses this figure as a measurement of business judgement such as decision whether it holds cross shareholdings or not.
In reality, there is a big gap between the cost of capital Asanuma recognises and the one market recognises. As stated in Japan’s Corporate Governance Code, a company should accurately identify its cost of capital and investors need to know what level of cost of capital the company identifies for the effective dialogue with the company.
Through the improvement of the transparency regarding the cost of capital which Asanuma recognises, the reason of the gap will be clear. This will also accelerate the dialogues between Asanuma and investors. Therefore, we would like Asanuma to disclose WACC and its basis of calculation.
- Low financial leverage as a result of holding excessive cash and cross shareholdings
One of the reasons for Asanuma’s low valuation is low leverage as a result of holding excessive cash and cross shareholdings. We would like Asanuma to dispose the cross shareholdings in 3 years and utilize the proceeds to increase shareholders’ value such as improvement of financial leverage.
- Net-cash which equals to its market capitalisation
As a result of low shareholders’ return, Asanuma’s market capitalisation is almost the same as net-cash. To prevent accumulating cash and equity capital, we would like Asanuma to achieve 100% payout ratio.
Please find the details of our proposals here