Japanese e-commerce and mobile communication company Rakuten Group Inc. said Tuesday it will raise up to 332 billion yen ($2.4 billion) via new share issues, including third-party allotments, as it tries to improve its financial standing following aggressive investments in its mobile phone business.
Part of the funds to be raised in early June will also be invested for the expansion of the mobile phone service as continued declines in losses from the telecommunication business and accelerated base station installations made it possible to "foresee, to a considerable extent, the total amount of the funding necessary for the future growth of the mobile business," Rakuten said.
The public offering of up to 468.1 million shares and the third-party allotments of 78.8 million shares will cause a share dilution of up to 34 percent, the company said.
Rakuten said it sees the scale of the expected share dilution as "reasonable" given that the use of the fresh capital for interest-bearing debt reductions such as corporate bond redemptions and the mobile business expansion should enhance its corporate value.
In the third-party allotments, Rakuten will offer the shares to internet service firm CyberAgent Inc., railway operator Tokyu Corp. and two asset management companies run by the family of Rakuten CEO Hiroshi Mikitani.
The Japanese internet retail giant has been trying to bolster its balance sheet, listing its bank unit Rakuten Bank Ltd. in April and agreeing last week to sell its stake in supermarket operator Seiyu Co. to U.S. investment firm KKR & Co.
