Resona to pay back up to 900 bil. yen in public funds+

TOKYO, Nov. 5 Kyodo -
Resona Holdings Inc. said Friday it will issue new common shares worth up to
600 billion yen as part of its plan to repay up to 900 billion yen in public
funds which the major banking group received amid a business crisis in 2003.
Resona will file a shelf registration with the Finance Ministry, effective Nov.
13, so that it will be able to raise the amount by issuing new shares to the
public during the year to Nov. 12, 2011.
After returning 400 billion yen in August, Resona still owes nearly 1.7
trillion yen to the government, which holds an equity stake of 63.7 percent in
terms of voting rights.
With the planned equity-linked financing, Resona will buy back its preferred
shares from the government for retirement, said the bank, Japan's
fourth-largest in asset holdings.
Resona also plans to buy back 300 billion yen worth of preferred shares by
tapping its surplus funds.
Public funds injected into Resona's capital base peaked at some 3.13 trillion
yen. While the amount dropped to 1.69 trillion yen as of the end of September,
1.26 trillion yen is held by the government in the form of preferred shares
which form the core of its capital.
Resona would like to pay back ''within five years'' all public funds it
received in 2003 through the issuance of preferred shares, its board chairman
Eiji Hosoya said at a press conference.
If 900 billion yen of taxpayer money is returned as planned, the government's
stake in Resona will decline to less than 50 percent.
Combining common shares Resona also issued in 2003 with preferred shares
offered before the year, the government is expected to retain some 30 percent
of voting rights.
Resona will need to further improve its earnings in order to complete the
return of public funds and remove the government's involvement in its
management, analysts said.
The planned repayment of public funds is aimed at eliminating Resona's
complicated capital structure based on preferred shares in order to create a
simple structure centered on common shares, the banking group said.
Resona plans to increase annual dividends on common shares by 20 percent in
order to ease the adverse impact of an increase in outstanding shares on
existing shareholders.
Hosoya said Resona has no plan to issue new shares following the planned
financing.
==Kyodo
2010-11-05 22:24:13