Toyota to buy back stock worth $3.5 billion, give half to charity

Toyota Motor Corp, the world's largest automaker, plans to buy back 60 million of its shares amounting to 1.89 per cent of the company's stock, valued at $3.5 billion (360 billion) in the largest buy-back by an automaker in more than a decade.

Cash-rich Toyota, which last repurchased stock in February 2009, plans to retire about half of the current buy-back by the end of June, by giving it to a charity fund run by the company for a paltry $1 per share.

Toyota, which saw its profits swell and cash pile mount, plans to sell 30 million of the bought-back shares to Japan Trustee Services Bank for a token sum of 1 each, which will then be used by a charity foundation. Dividends from the shares will be used to finance the foundation.

Toyota will cancel the other 30 million shares, according to a statement issued by the company on Tuesday.

The Japanese automaker, which expects record 1.9 trillion yen ($18.6 billion) profit for its fiscal year ending 31 March 2014, is also returning some cash to its shareholders and increasing dividends.

Toyota has proposed to pay 30 per cent of net income as dividends and said it has no plans to invest in new factories until at least 2015 and would rather focus on improving efficiency at existing plants.

Toyota president Akio Toyoda is setting up the Toyota Mobility Foundation, which will support global non-profit organisations and research projects on improving transportation systems in developing markets, the company said.

Toyota proposes to provide about 3 billion yen to 4.5 billion yen to the foundation each year, and the proposal is awaiting approval from shareholders at the annual general meeting in June, Toyota said.

Toyota, which makes the Camry sedans and Prius hybrids, said a weak yen that increased profitability of exports has helped it reap record profits during the year.