Tokyo: Resona Holdings will raise up to ¥680 billion ($8.2 billion) to repay government bailout funds by selling as many as 1.3 billion new shares, according to a government filing and calculations from the shares’ market price.
The share sale, targeting investors both in Japan and overseas, removes uncertainty over whether Japan’s fourth-largest bank would forge ahead after its announcement of a shelf registration in November sparked a slide in its share price.
Resona shares fell 4% to ¥523 on Friday, losing steam after a 14% surge the previous day on talk that a share sale was imminent.
Resona registered with regulators in November to raise up to ¥600 billion in a new stock offering within one year, but it had not given a target date for the issue or other details such as the number of shares.
Many investors had taken short positions in the stock after news of the registration, and its shares remain 15% below their early November level even after the latest gains, sharply underperforming other banking stocks.
Resona has said it would put the proceeds towards buying back ¥900 billion worth of state-owned preferred shares stemming from bailouts in the late 1990s and an effective nationalisation in 2003, when it nearly collapsed under a mountain of bad loans.
That would still leave the bank with ¥800 billion worth of taxpayer funds to refund.
Resona has hired Merrill Lynch Japan Securities and Nomura Securities to underwrite the share offering.