Kyushu stocks up 20% on debut

tokyo — Japan’s Kyushu Railway skyrocketed 20 per cent as the former state-owned firm made its Tokyo trading debut on Tuesday, after one of this year’s biggest initial public offerings.

Shares in the firm, which raised 416 billion yen ($4.0 billion) this month, fetched 3,120 yen ($30) each, up 20 per cent from their IPO price of 2,600 yen. The sale is the world’s third biggest this year after Postal Savings Bank of China’s $7.4 billion listing September and an offering this month from German renewable energy firm Innogy, worth about $5.4 billion.

Japan’s government sold about 160 million shares in the struggling regional railway, better known as JR Kyushu, which was born out of the 1987 breakup of Japanese National Railways. The government was hoping the sale would attract big-saving Japanese households as part of broader efforts to kickstart the economy.

Based in Fukuoka, about 560 miles southwest of Tokyo, the company has struggled with a money-losing railway business as the region’s population declines. To counter those losses, the firm has diversified into real estate, hotels and restaurants.

Chairman Koji Karaike, 63, a company veteran and judo black belt, said he could not have imagined listing the company three decades ago. “No one, including ourselves, thought we’d ever be able to list our shares,” he told Bloomberg News in an interview this month.

With losses equivalent to almost 30 per cent of sales, the company “faced a sense of crisis that we would fade away,” he said. Operating a total of 1,410 miles of railway with just over 560 stations, it is the fourth Japan Rail company to be publicly traded, following the listings of its three bigger peers in the 1990s. Its revenue came to 378 billion yen in the fiscal year ended in March.

Last year, Japan’s government sold off shares in state-owned behemoth Japan Post. — AFP