Japan aims to raise around $12b in postal giant share sale


Japan said Monday that it would sell another piece of the country 's massive postal service into a stock quote that is expected to generate about $ 12 billion.

Tokyo unloads up to 990 million shares in Japan Post, or about 22 percent of its outstanding shares, after an initial public offering in 2015 that began a privatization long-term public giant.

The latest sale could increase by 1.3 trillion yen (12 billion dollars) according to Monday's closing price of 1,321 yen. The sale price will be decided between 25 and 27 September, said the Ministry of Finance.

Some 1.43 trillion yen was raised in an IPO nearly two years ago, including shares in the banking and insurance units of Japan Post. This was the largest privatization of the country since the IPO of Nippon Telephone & Telegraph in 1987.

Most of the proceeds were allocated to reconstruction after the tsunami disaster by Japan in 2011

.

It is hoped that beginning to privatize what is effectively the world's largest bank by deposits could improve investor sentiment and spur efforts to free Japan's highly regulated economy.

The vast postal group has a network of some 24,000 offices across the country and is located on assets valued at more than 290 trillion yen.

Branches offer cash deposit services and insurance, with many retired pensioners withdrawing their pensions from a local branch.

This system has long been criticized both internally and outside Japan. Financial institutions, courier services and foreign governments argue that the public body operates in areas where it unfairly competes directly with private companies.

The government of former Prime Minister Junichiro Koizumi split the state giant in units in 2007, to manage deliveries, savings, insurance and countertops at each of its post offices .

Tokyo initially withheld the full ownership of the company.

But Japan is struggling with debt of more than double the size of its economy – one of the heaviest in the world – and sought to sell state assets to finance costs in a social spiral.

The shares of Japan Post did not perform particularly well, closing below their IPO price of 1,400 yen on Monday.

Earlier this year, the company declared its first annual net loss since the 2007 split, which has blamed an impotent $ 5.1 billion of Toll, a giant of Australian transport logistics.

The purchase marked Japan Post's first overseas expansion and came before the 2015 IPO, but a drop in commodity prices and a slowdown in the US, Domestic and Chinese activity of Toll have well bitten its results.

Last year, Kyushu Railway, owned by the state, made its commercial debut after raising some 416 billion yen in an IPO.

Tokyo has sold shares in the troubled regional railway, better known as JR Kyushu, in the hope of attracting large-scale Japanese households as part of a " efforts to stimulate the economy.



Source link