Japan picks five firms to lead sale of Tokyo Metro shares

Credit: REUTERS/Issei Kato

Japan's government on Wednesday picked five brokerage firms to lead an initial public offering (IPO) of shares in Tokyo's metro operator, the Ministry of Finance said, paving the way for progress in one of the country's major privatisation efforts.

By Tetsushi Kajimoto and Takaya Yamaguchi

TOKYO, May 25 (Reuters) - Japan's government on Wednesday picked five brokerage firms to lead an initial public offering (IPO) of shares in Tokyo's metro operator, the Ministry of Finance said, paving the way for progress in one of the country's major privatisation efforts.

The chosen firms were three Japanese institutions -- Nomura, Mizuho and Mitsubishi UFJ Morgan Stanley -- and two foreign banks -- Goldman Sachs and Bank of America. Of the five selected firms, Nomura, Mizuho and Goldman Sachs will be tasked with the role of "global coordinator," the ministry said.

The ministry had short-listed nine firms for the leading roles in the planned IPO of Tokyo Metro Co., which operates nine metro lines in the Tokyo metropolitan area.

The unsuccessful short-listed candidates were Daiwa, SMBC Nikko, JP Morgan and UBS.

The national government owns 53.4% of Tokyo Metro shares, the remainder belonging to the Tokyo metropolitan government. The two governments plan to bring the total of their stakes down to 50%.

The ministry has not yet determined the size, timing or method of the sale of shares, but a law authorising the disposal requires it to be completed no later than the fiscal year beginning in April 2027.

"The timing of actual sales has not yet been decided at the moment," the ministry said in a statement. "We will decide on actual handling (of the sale) while comprehensively taking into account the stock market conditions going forward."

Proceeds are intended to pay for some of the debt that the national government accumulated when rebuilding areas devastated by an earthquake and tsunami in 2011.

If Tokyo Metro's value equals its net assets of 640 billion yen ($5.05 billion), the IPO could raise about 300 billion yen, of which the national government share would come to around 170 billion yen, according to the ministry.

($1 = 126.80 yen)

(Reporting by Tetsushi Kajimoto and Takaya Yamaguchi; Editing by Bradley Perrett)

((tetsushi.kajimoto@thomsonreuters.com;))

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