Jan 6, 2015

Japan Post Group listing three company's stocks at the same time within the year.

The president and CEO Mr. Taizo Nishimuro

On December 26, Japan Post Group announced its plan to sell and list the stocks of the three companies: Japan Post, Japan Post Bank, and Japan Post Insurance at the same time. The time of the listing will be later than the middle of the next fiscal year. Around June of this year, they will apply for listing to the Tokyo Stock Exchange. After a two to three month admission process, it is expected to be listed around December. At first, the two finance companies (Japan Post Bank and Japan Post Insurance) are going to gradually sell stocks until their Japan Post's possession ratio will be about 50%. Ten years have passed with twists and turns since the Postal Service Privatization Act was approved in October, 2005 (enacted in October, 2007), now they will represent a major milestone.

With Postal Service Privatization Act (refer to the chart), it shows as the stipulation that the government has the obligation to hold more than one third of the stock, and the two finance companies have to dispose of all their stocks. On the other hand, the stock of Japan Post is obligated to be held 100% by Japan Post on its own.

This time, Japan Post Group will list the three companies' stocks at the same time in order to achieve goals such as promotion of postal service privatization, contribution to the funds for restoration, securing the freedom of management, and so on. The income of Japan Post earned by the sale of the two finance companies, the need for funds is considered to be enough for appropriation for the group's ready cash. It is expected to be appropriated to the acquisition funds of Treasury Shares by the government. They are aiming to make an investment for the promotion of postal service privatization, and contribute securing the funds for restoration.

The following is the speech of the president and CEO Taizo Nishimuro at the press interview on the same date.

*I have decided that we should aim for listing the three companies' stocks at the same time because of the needs of the group's management. They include the promotion of postal service privatization, legal requests (such as contribution to the restoration that our company's stock sale income will be appropriated to), and securing the freedom of management early and establishing management system. As far as I know, this is going to be the first scheme in our country, listing the stocks of three parent subsidiary companies all at the same time. This will happen only after finally being approved by the Tokyo Stock Exchange. The brokerage lead manager has told us we have a good chance and advised us this should be the way to evaluate the stocks properly.

*The specific time for listing will be discussed later with the Ministry of Finance and the brokerage lead manager. At this point, we have only decided to aim for listing the three companies' stocks later than the middle of the next fiscal year.

*The scale of the sale will be also discussed with the Ministry of Finance and the brokerage lead manager based on the market trend at that time. For that reason, we cannot talk about the details at this point. In the Tokyo Stock Exchange, they have a standard that more than 35% of the outstanding shares must be listed there. However, we are considering not causing any confusion and having the proper scale to be digested smoothly when we sell. We will try to adjust the special measures with the Tokyo Stock Exchange, and will make our final decision by checking the trends of the market and the investors' needs at the time.

*The future sales of the two finance companies' stocks are going to be aimed to follow Postal Service Privatization Act's purpose, which is the disposal of all of their stocks. They are supposed to be disposed as soon as possible. We will check the two finance companies' management situation and the effect of the Universal Service's performance against its responsibility. Following the act's purpose, we are going to broaden our eyes and consider expanding the freedom of the two finance companies' management, and demonstrate the total ability as one group. First of all, we are thinking of gradually selling stocks until the holding ratio becomes around 50%.

*If you ask us weather we can attract people with Equity Story like Deutsche Post did, the fact is that they announced the good points first and then made Equity Story, but we are not going to use the same method. Utilizing the existing postal network as a group is an important part for the local community. Sticking to the policy, we will think how we can make people have dreams about other parts. We are not going to quit postal services like Deutsche Post or sell the bank quickly. Similar to the UK's royal mail stamp prices were raised, they say it was for the better quality service but the world and Japan is not so easy. We have the responsibility to remain in Japan, and run the companies in the way that best contributes to the Japanese society. Postal service costs should not be reflected on the postal service fee right away. We are obligated to maintain the current price as long as we see the service is actually used at the price.

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