Tokyo to raise $7bn from NTT global share sale

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The Independent Online
SHARES IN Japan's Nippon Telegraph and Telephone, the world's largest telecoms group, are to be offered to international investors for the first time as part of a placing which will raise about $7.5bn (pounds 4.5bn) for the Japanese government.

Japan's Ministry of Finance yesterday confirmed that it plans to sell one million shares in NTT - 6 per cent of the company - to private and institutional shareholders over the next month. The Japanese government owns 65 per cent of NTT.

Although the company was privatised in 1987, the government has not sold any shares for 10 years, and shares have only been made available to Japanese investors.

The stake will be split into three tranches earmarked for investors in Japan, the US and Europe. The relative sizes of the tranches will be announced on Monday. The sale, likely to take place at a small discount to the current share price, will be priced in mid-December.

The placing follows NTT's successful flotation of 33 per cent of its mobile phone subsidiary, DoCoMo. That raised $18.4bn and was the world's largest-ever equity offering.

NTT's share price has slumped in recent months from a peak this year of 1.28m yen to 819,000 yen in early October owing to rumours of the government share sale. Yesterday the shares closed up 3.45 per cent at 929,000 yen, valuing NTT at about $120bn.

Results for the half to September, out yesterday, showed NTT's profits rising to 265bn yen, up by 49 per cent. The figures masked a 41 per cent drop in profits from NTT's conventional fixed-line business.

The company has struggled to hold its traditional telecoms market in the face of competition at home. However, restrictions preventing NTT from operating overseas have now been lifted, allowing it to expand into other markets.

NTT, which is expected to join an international telecoms alliance, has been mooted as a partner for British Telecom and AT&T as it would offer a vital presence in the Far East.

The NTT president, Junichiro Miyazu, said: "We are very pleased by the ministry's decision."

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