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Japan Post IPO to include separate bank, insurance units' listings: Sources

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Japan Post IPO to include separate bank, insurance units' listings: Sources

(Reuters) — IPO plans for state-owned Japan Post Holdings Co, one of the world's biggest financial institutions, will include separate listings of its bank and insurance units, sources familiar with the matter said.

Japan's government has been working on the IPO to raise as much as 4 trillion yen ($33.6 billion) in several tranches for areas devastated by the 2011 earthquake and tsunami, but the structure of the listing has so far been unclear.

The government has said it expects to raise 1 trillion yen ($8.4 billion) in the first round of sales, basing its assumption on the results of share offers of state-owned companies in the past.

Separate listings for the bank and insurance units, which account for 90% of Japan Post's profits, could help the government rake in more funds than just a simple listing of the holding company.

It would also allow Japan Post Holdings, which has 150 million outstanding shares, to use some of the money raised in the offerings of its bank and insurance arms to buy some of its shares directly from the government, the sources said. This will help prevent the market being flooded with shares, supporting the per share price of the holding company.

“This is the biggest bank in Japan and in that sense, the IPO will have some appeal. The insurance unit is also the biggest insurance firm in Japan,” said Masayuki Otani, chief market analyst at Securities Japan.

“If the economy is doing well at the time of the offering, it will do well enough,” he said.

Some details of the listing, which has been pushed back to at least September 2015 from expectations of a spring debut, are likely to be unveiled at a briefing by Japan Post President Taizo Nishimuro on Friday, the sources said.

Mr. Nishimuro is, however, not likely to give an updated estimate of IPO proceeds.

A Japan Post Holdings spokesman declined to comment.

According to the Nikkei business daily, the government plans to list 10% of outstanding shares for each of the three companies — Japan Post Holdings, Japan Post Bank Co. Ltd. and Japan Post Insurance Co. Ltd.

The group's other main unit — the national postal service with more than 20,000 post offices — will not be listed. It has seen steep declines in earnings over the past decade with the growth of e-mail and web billing.

The Japan Post group has about 13.8 trillion yen ($115.9 billion) in net assets. The bank unit's recurring profit in the last financial year fell 5% to 565 billion yen ($4.7 billion) while the insurance unit's recurring profit declined 12% to 463.5 billion yen ($3.9 billion).

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