JR Kyushu set to raise $5.6b from IPO

Shares in JR Kyushu, which operates bullet trains, hotels and restaurants on Japan's third-largest island, are due to list in Tokyo on Oct 25 and in Fukuoka the following day. Three-quarters of the shares are being sold domestically, with the rest
Shares in JR Kyushu, which operates bullet trains, hotels and restaurants on Japan's third-largest island, are due to list in Tokyo on Oct 25 and in Fukuoka the following day. Three-quarters of the shares are being sold domestically, with the rest offered to overseas investors.PHOTO: BLOOMBERG

TOKYO • Japan's government is set to raise 416 billion yen (S$5.6 billion) from the initial public offering (IPO) of state-owned Kyushu Railway after pricing the stock at the top end of a marketed range.

The shares will be sold at 2,600 yen each, against the offered range of 2,400 to 2,600 yen, according to a filing yesterday. Japan is selling all 160 million shares held by Japan Railway Construction, Transport and Technology Agency, which fully owns JR Kyushu.

The IPO, set to be the world's third biggest this year, is part of Prime Minister Shinzo Abe's efforts to encourage the Japanese to invest some of their 1,700 trillion yen household savings in the stock market. JR Kyushu's IPO follows debuts in the 1990s by East Japan Railway and Central Japan Railway after the break-up of state-run Japan Railways in 1987.

Shares in JR Kyushu, which operates bullet trains, hotels and restaurants on Japan's third-largest island, are due to list in Tokyo on Oct 25 and in Fukuoka the following day. Three-quarters of the shares are being sold domestically, with the rest offered to overseas investors. Japan aims to sell more than half the shares to individual investors and has held eight of 10 investor presentations on the island of Kyushu itself.

Nomura Holdings, Mitsubishi UFJ Morgan Stanley Securities and JPMorgan Chase are global coordinators for the public offering, while SMBC Nikko Securities and Goldman Sachs Group will also lead the global offering.

JR Kyushu, which gets most of its profits from real estate and station-building businesses, is the fourth of the JR firms selling shares to the public.

The shares will list on the first section of the Tokyo Stock Exchange, one of five markets it operates and where most large companies are listed, according to the Japan Exchange Group.

The company has proposed a dividend of 37.5 yen for the six months through March and is offering fare discounts to potential investors to help boost demand for the offering. JR Kyushu predicts net income of 38.2 billion yen in the year ending March 31, with sales forecast to rise 0.2 per cent to 379 billion yen.

The world's largest IPO this year was by Postal Savings Bank of China, which raised US$7.4 billion (S$10.3 billion) in a Hong Kong share sale last month, while Innogy SE raised about US$5.1 billion in Frankfurt this month.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on October 18, 2016, with the headline 'JR Kyushu set to raise $5.6b from IPO'. Print Edition | Subscribe