Rakuten Bank shares fall sharply in Tokyo after parent’s plans to pare stake

Rakuten Bank’s shares fell sharply Thursday morning after parent Rakuten Group said it planned to pare its stake in the lender.

Rakuten Bank’s shares

were recently 8.4% lower at 2,508 yen. The stock is on track for its largest one-day decline since Sept. 27, according to FactSet.

Rakuten Group

said at the Tokyo stock market open Thursday that it will offer 24.55 million shares of Rakuten Bank at Y2,470 per share, a 9.8% discount to Wednesday’s closing price of Y2,738, in an overseas secondary offering.

The total value of the offering is around Y60.64 billion ($411.68 million).

Rakuten Group’s stake in Rakuten Bank will fall to 49.27% from 63.34% following the offering, it said.

The Japanese technology conglomerate is selling its assets as free cash flow is still in the red and it has to repay or refinance almost Y1 trillion of debt over the next two years, Citi Research analyst Mitsunobu Tsuruo said in a report.

A successful overseas sale of Rakuten Bank shares should provide a certain extent of support, but issues will probably remain, he said, without elaborating.

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