Fir Tree Supports Announced Improvements at JR Kyushu

 Believes Changes to Shareholder Return Policy with a Share Repurchase Plan Represent a First Step Towards Optimizing JR Kyushu’s Capital Structure

Fir Tree Looks Forward to Continuing to Engage with Company’s Board and Management

NEW YORK & TOKYO--()--Fir Tree Partners ("Fir Tree"), manager of certain funds that reported collective beneficial ownership of approximately 6.1% of the outstanding shares of Kyushu Railway Company ("JR Kyushu" or the “Company") (TSE ticker 9142), today commented on the Board of Directors’ (the “Board”) announcement of JR Kyushu’s shareholder return policy and share repurchase plan.

The Company’s plan includes the following elements:

  1. Up to a 2% share repurchase to be completed by March 31, 2020.
  2. A 35% target dividend payout ratio (now excluding share repurchases) through the Fiscal Year ending in March 2022, including a minimum annual dividend of ¥93 per share.
  3. The issuance of ¥20bln in new low-cost debt in December 2019.

Aaron Stern, Partner at Fir Tree, stated:

Fir Tree commends the Board for recognizing the need to improve JR Kyushu’s capital structure and we are pleased with this important initial step towards resolving the issue. We are supportive of the overall direction of change at the Company and agree that more must be done in order to optimize the capital structure and realize JR Kyushu’s full potential for the benefit of all stakeholders. We plan to continue to engage with the Company with this goal in mind.

Fir Tree would like to acknowledge the improvements in the Company’s disclosure and reiterate that additional concrete steps are needed, including disclosing the expected returns on ¥200bln real estate investments designated in the 2019-2021 Medium-Term Plan and more detailed operating and financial metrics for key real estate assets. We believe improved disclosure will facilitate more accurate financial analysis and will lead to increased value and a lower cost of capital.

Fir Tree appreciates the Board’s focus on governance, and to that end, will continue to work with the Company to ensure that it has appropriate external Board members with relevant real estate and finance experience to complement the expertise of current directors.

We appreciate the opportunity to have an ongoing constructive dialogue with JR Kyushu’s Board and management team and we look forward to further engagement as the Company considers additional share repurchases and other improvements to enhance its long-term corporate value.”

About Fir Tree Partners

Fir Tree Partners, founded in 1994 and located in New York City (HQ) and Miami, is a value-oriented investment manager that invests on behalf of endowments, charitable and philanthropic foundations, pension funds and other institutional and private investors. The firm has successfully applied its opportunistic approach across a wide array of asset classes, industries and geographies, including in Japan where it has been actively investing for nearly a decade. Fir Tree Partners has adopted Japan’s Stewardship Code.

Contacts

Japanese Media:

Dan Underwood / Tadashi Shiokai
Ashton Consulting
+81 3 5425-7220
FTPR@ashton.jp

U.S. Media:

Sloane & Company
Dan Zacchei / Joe Germani
(212) 486-9500
DZacchei@sloanepr.com / JGermani@sloanepr.com

Contacts

Japanese Media:

Dan Underwood / Tadashi Shiokai
Ashton Consulting
+81 3 5425-7220
FTPR@ashton.jp

U.S. Media:

Sloane & Company
Dan Zacchei / Joe Germani
(212) 486-9500
DZacchei@sloanepr.com / JGermani@sloanepr.com