Japan offers railroad IPO, as more trains are privatized

Published 1:30 am Sunday, October 23, 2016

By Yuri KAgeyama

Associated Press

The Japanese government expects to raise $4 billion from an initial public offering of 160 million shares in Kyushu Railway Co., or JR Kyushu, the latest in the privatization of this nation’s prized train operations.

The initial price is$24 a share, the company said last week, higher than a range initially announced as topping out at $23.

The move is part of Prime Minister Shinzo Abe’s “Abenomics” revival program, which is betting that Japanese people, who tend to save rather than spend, might see the IPO as a safe investment.

Japan’s southwestern main island of Kyushu has a bullet train line and other, less successful local trains. In the late 1980s, Japan’s state-owned railway system was reorganized into several entities to become more competitive and efficient.

JR Kyushu will list on the Tokyo Exchange on Tuesday. A day later it will list on the regional Fukuoka exchange.

JR Kyushu, established in 1987, has seen operations pick up in recent years as tourism from overseas has revived. But it is still suffering from the effects of earthquakes in April; some sections of its system are still undergoing repairs.

The share offering is among the biggest IPOs this year, after the Postal Savings Bank of China and Innogy, a German renewable energy company.

Trains in Japan almost always run on time. In Tokyo and other major cities, the JR systems are supplemented by private trains systems, subways and fancy monorails.

— Associated Press