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Japan raises 1.3t yen selling another stake in postal giant

[TOKYO]Japan's government raised about 1.3 trillion yen (S$15.5 billion) selling a stake in Japan Post Holdings Co, completing the nation's biggest public offering this century.

The shares were sold to domestic and foreign investors for 1,322 yen apiece, 2 per cent lower than the closing price on Monday, Tokyo-based Japan Post said in a regulatory filing. That compares with the 2 per cent to 4 per cent discount range previously indicated by the Ministry of Finance.  Almost two years after the company was listed along with its banking and insurance units, Japan is further divesting its ownership partly to fund the reconstruction of areas destroyed by the 2011 earthquake and tsunami in the northeast. Demand for the offering withstood headwinds including the stock's underperformance, losses stemming from a botched acquisition, declining mail volumes, and low interest rates that are eroding profitability.

Orders from overseas investors were more than double the number of shares being offered to them as of Friday, while demand in Japan was about 1.5 to two times greater than the domestic allocation, people with knowledge of the matter said before the announcement. About 80 per cent of the offering was made to domestic investors - mainly individuals - and the rest to institutions abroad.

Amid the solid demand, a document distributed to underwriters on Friday said Japan Post will give a preference to long-term investors and those who showed an intention to purchase them at an early stage. The document was issued by the global coordinators and obtained by Bloomberg.  Shares of Japan Post closed 1 per cent lower at 1,349 yen on Monday. The stock has slid 3.6 per cent since its November 2015 initial public offering, compared with a 9.6 per cent gain in the benchmark Topix index.

Goldman Sachs Group Inc, Daiwa Securities Group Inc and Nomura Holdings Inc were joint global coordinators of the deal, which involved 61 brokerages. It was the biggest equity offering of a single company in Japan since Nippon Telegraph & Telephone Corp's 1.59 trillion-yen sale in 1999, according to data compiled by Bloomberg. Japan raised about 1.4 trillion yen with the three-pronged IPO of Japan Post and its bank and insurer in 2015.


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