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Japan to Start Process to Sell $8.5 Billion Postal Stake

·2-min read

(Bloomberg) -- The Japanese government may kick off the process to sell about 950 billion yen ($8.5 billion) shares in Japan Post Holdings Co. as early as this week, marking the state’s ongoing privatization of the postal and financial-services giant six years after its initial public offering.

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Government officials were due to hold a meeting with bankers on Wednesday to start work on the third round of the share sale that it aims to complete by the end of the year, according to people with knowledge of the matter who asked not to identified because the matter is private.

With the offering, the state plans to cut its stake to one-third -- the minimum it’s required to hold by law -- from about 61% currently, the people said. Japan Post is also considering buying back some of its shares from the government, they said.

Shares in Japan Post closed down 5.7% on Wednesday.

Japan is seeking to raise about 4 trillion yen from the sale to fund the reconstruction of areas devastated by the March 2011 earthquake and tsunami. The government previously owned 100% of Japan Post and raised 1.4 trillion yen in 2015 when it sold a 19.5% holding and 1.4 trillion yen in 2017 when it offloaded a further 23.6%.

The Ministry of Finance selected the underwriters for the sale in 2019. Daiwa Securities Group Inc., Mizuho Securities Co. and SMBC Nikko Securities Inc. are managing the domestic portion of the offering. Goldman Sachs Group Inc., Bank of America Corp. and JPMorgan Chase & Co. are handling the overseas sale.

The third round of sale was expected as early as in 2019 but it was made difficult after Japan Post shares fell sharply in the wake of a scandal over improper sales practice at its insurance unit.

An official at the Ministry of Finance said it would consider the timing of the sale by watching market trends and Japan Post’s business conditions, and won’t disclose each preparatory step. A representative for Japan Post said nothing is decided about a possible share buyback.

(Updates with closing share prices in fourth paragraph.)

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