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UPDATE 1-Japan says won't sell Japan Tobacco shares before end-Dec
November 16, 2012 / 8:46 AM / in 5 years

UPDATE 1-Japan says won't sell Japan Tobacco shares before end-Dec

* Ministry has already hired underwriters for share sale

* Proceeds from sale to be used for reconstruction of quake-hit areas (Adds details of plan)

TOKYO, Nov 16 (Reuters) - Japan’s Ministry of Finance said on Friday it will not sell shares in Japan Tobacco before the end of December, delaying the raising of funds for rebuilding areas hit by last year’s earthquake and tsunami.

The ministry’s announcement came on the day Japan dissolved parliament’s lower house and set a Dec. 16 general election that is likely to lead to a change of government.

The ministry, which now holds 50 percent of Japan Tobacco shares, has already selected JPMorgan Chase & Co, Daiwa Securities, Goldman Sachs and Mizuho Securities as underwriters for the offering.

Japan Tobacco had said earlier it would buy back about 250 billion yen of its outstanding shares if the government proceeds with the share sale.

Japan’s parliament last year passed a set of bills for tax hikes and other steps, including sales of the government stakes in state-owned companies, to help pay for rebuilding after the devastating earthquake and tsunami.

Japan last month also unveiled plans to sell shares of Japan Post Holdings Co, which runs the nation’s biggest savings institution, within three years to raise money for reconstruction.

Japan Tobacco has 10 million outstanding shares. Under current law, the ministry can only sell up to 1.66 million shares in Japan Tobacco so that it maintains a one-third stake. At current market prices, the sale would help Japan raise 376 billion yen ($4.6 billion). ($1 = 81.1000 Japanese yen) (Reporting by Takaya Yamaguchi; Writing by Junko Fujita; Editing by Michael Watson and Muralikumar Anantharaman)

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