Japan to start process to sell 950b yen Japan Post stake

[TOKYO] The Japanese government may kick off the process to sell about 950 billion yen (S$11.5 billion) shares in Japan Post Holdings Co. as early as this week, marking the state's ongoing privatisation of the postal and financial-services giant six years after its initial public offering.

Government officials are 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 68 per cent currently, the people said. Japan Post is also considering buying back some of its shares from the government, they said.

Shares in Japan Post were trading down 4 per cent at 9.27am on Wednesday and have gained 26 per cent so far this year.

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 per cent of Japan Post and raised 1.4 trillion yen in 2015 when it sold a 19.5 per cent holding and 1.4 trillion yen in 2017 when it offloaded a further 23.6 per cent.

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

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