At its Board meeting on Nov 30, Mitsubishi UFJ Financial Group Inc. (MTU) said that it plans to issue new shares and the secondary offering of shares along with a withdrawal of the shelf registration in Japan for future equity issuances.
 
Mitsubishi, Japan’s largest bank, plans to issue 2.34 billion of new shares by way of public offering. In addition, 0.16 billion shares will be issued by way of third party allotment, if required.
 
The share issue is a move by the management to ease concerns of government officials in the U.S. and Japan about the soundness of the banking industry in the wake of the financial meltdown. Management said that in anticipation of changes in the global regulatory and competitive landscape, Mitsubishi intends to secure its solid capital base through this capital increase in order to continue to contribute to the real economy, both domestically and globally, as a provider of a stable source of funds and financial intermediary functions.
 
Mitsubishi plans to utilize the proceeds from the issue to make an investment in the Bank of Tokyo-Mitsubishi UFJ Ltd and to strengthen its overall group capital base. The company believes this will enhance its ability to pursue growth opportunities and improve profitability.
 
Earlier in November, Mitsubishi UFJ, the bank, planned to merge with Morgan Stanley. However, it had to forgo the plan because of pressure from the regulators.
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