* JR Kyushu to price shares between 2,400 yen and 2,600 yen
* Japan to raise as much as $4 bln from JR Kyushu IPO
* Japan govt to sell entire stake in JR Kyushu
By Junko Fujita
TOKYO, Oct 6 The Japanese government is set to
raise as much as $4 billion by selling its entire holding in
Kyushu Railway Co, according to a government filing on
Thursday, in what will be Japan's largest initial public
offering (IPO) this year.
Kyushu Railway, better known as JR Kyushu, will price its
IPO between 2,400 yen and 2,600 yen per share, according to the
The government, which currently owns 100 percent of Kyushu
Railway, plans to sell all of its 160 million shares in the
railway operator. If the price is set at the top of the range,
the offering size will be 416 billion yen ($4.02 billion).
Last month the government set the indicative price of the
IPO at 2,450 yen a piece.
The government plans to set the final price on Oct. 17 after
gauging demand from investors.
The shares will be marketed at a time investors are cautious
about the market. Japanese stocks are seen settling for an
annual drop this year, ending a four-year rally driven by Prime
Minister Shinzo Abe's initiative to end deflation, according to
a recent poll by Reuters.
The benchmark Nikkei 225 has fallen 11 percent so
far this year on concerns a stronger yen would hurt corporate
But with a potential market value of 416 billion yen, JR
Kyushu is expected to be included in Japan's major indexes, and
thus see demand as passive investors like index funds would be
forced to hold the shares in their portfolios.
The government sold its shares in other railway operators in
the past, such as the East Japan Railway Co, West Japan
Railway Co and Central Japan Railway Co, as it
broke up and privatized the former state-owned railway network.
JR Kyushu, which operates in Japan's southern island of
Kyushu, could take advantage of the foreign tourist boom on the
The island boasts hot springs and scenic landscapes and
attracted a record 2.8 million foreign visitors last year, an
increase of 69 percent from a year earlier, outpacing Japan's 47
And the number of foreign tourists has been increasing every
month from a year earlier so far this year, hitting 2.2 million
in July, according to the local government, despite part of the
island being hit earlier this year by a series of deadly
earthquakes that killed at least 40 people.
($1 = 103.5600 yen)
(Reporting by Junko Fujita; Editing by Muralikumar