Bulletin
Investor Alert

New York Markets Open in:

Jan. 10, 2005, 12:01 a.m. EST

Japan Mulls Sale of Stake in Railway

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Central Japan Railway Co. (9022)
  • X
    East Japan Railway Co. (9020)

or Cancel Already have a watchlist? Log In

By Andrew Morse

TOKYO -- The Japanese government is studying the possibility of selling its $7 billion stake in Central Japan Railway /zigman2/quotes/205638698/delayed JP:9022 -1.69% Co. in the next fiscal year, part of a wide-ranging asset sale designed to whittle down the country's giant public debt.

News of the potential sale comes as Tokyo speeds up the sale of assets it owns to help control its surging public debt -- the result of big public-works projects aimed at keeping Japan's wobbly economic recovery on track. Japan had racked up $7.3 trillion of debt as of Sept. 30, according to the Ministry of Finance.

A spokeswoman for the Ministry of Transportation, which holds a 39.6% stake in the company, said it is watching market conditions to gauge if a sale would be possible in the business year beginning April 1. The company, part of a former state railway monopoly and now known as JR Tokai, initially was listed in October 1997 as part of a government privatization drive. The government had been planning to eventually sell its stake in JR Tokai, but hadn't previously disclosed timing of the sale.

"We are looking at the possibility of selling all or part of our stake in JR Tokai," the spokeswoman said. "But we have no concrete plans as to when or how such a sale might happen."

News of the potential sale comes as Japan speeds up the sale of assets it owns to help control its surging public debt -- the result of big public-works projects aimed at keeping Japan's wobbly economic recovery on track. Japan had racked up $7.3 trillion in debt as of Sept. 30, according to the Ministry of Finance.

Japan's government also is considering selling part of its stake in telecommunications giant Nippon Telegraph & Telephone Corp., currently worth about $5 billion, by March 2006, according to a person familiar with the situation. Though that sale hasn't yet been planned, the government is including the expected proceeds of the deal in its budget for the fiscal year beginning April 1 as planned revenue.

JR Tokai is part of the Japan National Railways, a state railroad monopoly that the government began privatizing in 1987. Two of the other railroad companies, East Japan Railway /zigman2/quotes/201416061/delayed JP:9020 -1.58% Co. and West Japan Railway Co., already have been fully privatized.

On Friday, JR Tokai shares slipped 0.59% to 836,000 yen. The benchmark Nikkei 225 Stock Average fell 0.51%.

The Ministry of Transportation also holds the entirety of four other companies that formerly were part of the state monopoly -- Hokkaido Railway Co., Kyushu Railway Co., Shikoku Railway Co. and Japan Freight Railway Co. The Transportation Ministry plans to offer the companies' shares to the public soon, but no specific plans have been made, the spokeswoman said.

Write to Andrew Morse at andrew.morse@wsj.com

/zigman2/quotes/205638698/delayed
JP : Japan: Tokyo
¥ 15,750.00
-270.00 -1.69%
Volume: 677,200
May 12, 2021 3:00p
P/E Ratio
N/A
Dividend Yield
0.83%
Market Cap
¥3200.49 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/201416061/delayed
JP : Japan: Tokyo
¥ 7,394.00
-119.00 -1.58%
Volume: 1.01M
May 12, 2021 3:00p
P/E Ratio
N/A
Dividend Yield
1.35%
Market Cap
¥2898.34 billion
Rev. per Employee
N/A
loading...

This Story has 0 Comments
Be the first to comment

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.