Japan Post books $588 mln impairment loss on Rakuten holding
30/06/2023 08:50
TOKYO, June 29 (Reuters) - Japan Post Holdings 6178.T
said on Friday it booked an impairment loss of 85.1 billion yen
($587.5 million) in the April to June quarter on its stake in
beleaguered Japanese e-commerce giant Rakuten Group 4755.T .
Rakuten shares dropped to 499 yen at Friday's close, a level
last seen in 2009 and well below the 1,145 yen per share Japan
Post paid to acquire 8.32% of the firm in March 2021.
Japanese accounting rules state that companies must register
the impairment loss should a holding fall below 50% of the
purchase price with no prospect of recovery. The loss amounts to
over 50% of Japan Post's 150 billion yen original investment.
Japan Post and Rakuten announced a capital and business
alliance two years ago, but the cash-burning rollout of the
latter’s mobile business has brought about four consecutive
years of losses.
To raise much-needed cash, Rakuten listed its banking
arm and has said it plans to do the same for its securities
unit.
In May Reuters reported that Rakuten planned to raise around
300 billion yen by issuing new shares, precipitating a record 9%
daily drop in its share price.
($1 = 144.7700 yen)
(Reporting by Anton Bridge; Editing by Susan Fenton)
((Anton.Bridge@thomsonreuters.com;))