CORRECTED - CORRECTED-UPDATE 2-T&D Holdings plans up to 120 bln yen share is

(Corrects paragraph 1 to ... gave notice on Thursday that it may raise ..., not ... said on Thursday it would raise ...; adds new paragraph 4)

* T&D sold 58 billion yen in shares in March

* Japanese companies' new share sales grow 5-fold this year (Adds value of share offerings in Japan)

TOKYO, Nov 5 (Reuters) - Japanese insurance company T&D Holdings Inc (8795.T) gave notice on Thursday that it may raise up to 120 billion yen ($1.3 billion) to repay debt by selling new shares.

The firm said it had hired Nomura Holdings Inc (8604.T) and Daiwa Securities SMBC, the investment banking arm of Daiwa Securities Group (8601.T) to handle the proposed sale.

Japanese companies have sold $38.3 billion worth of shares so far this year, an almost five-fold increase from $8.7 billion a year earlier, according to Thomson Reuters data, as stock markets start to shake off some of the worst effects of the global financial crisis.

T&D filed documents at the finance ministry to register the share sale plan.

An issue would follow a 58 billion yen share offering from the company in March this year.

Demand for new money through share sales has been particularly strong from financial institutions as they try to strengthen their capital bases. Sumitomo Mitsui Financial Group (8316.T) in June sold $9.4 billion of shares, while Mizuho Financial Group Inc (8411.T) issued $5.9 billion of shares in July. T&D shares, which were up 0.6 percent on Thursday, have fallen 40 percent since the beginning of this year. T&D's announcement was made after the market closed. (Reporting by Junko Fujita and Yuko Inoue; Editing by Joseph Radford)