TOKYO: A transport ministry official said late last week the Japanese government was aiming to sell its 40 per cent stake in Central Japan Railway (JR Central) "as soon as possible", in a move that could mark one of the biggest public offerings this year. The government's stake in JR Central is currently worth Y740bn ($7.0bn). A possible offering this year would trigger intense competition among both domestic and foreign investment banks to underwrite the issue. Kozo Fujita, director of JR affairs at the transport ministry, said the government was aiming to sell its stake as soon as possible to assist in the total privatisation of JR Central. JR Central, JR East and JR West were created in April 1987 when the heavily indebted state monopoly, Japanese National Railways, was split into seven companies. The government has fully unloaded its stakes in both JR East and JR West in recent years. Fujita said the government had not yet invited investment banks to send in proposals regarding the underwriting of the issue. Nomura and Goldman Sachs underwrote the JR East issue, while Nikko Citigroup and UBS were the underwriters for the $2.5bn JR West share offering last year. The transport ministry might split the offering into two tranches. The Japan Railway Construction, Transport and Technology Agency (JRTT) is the organisation that holds the 886,000 shares of JR Central. The JRTT is an independent agency under the auspices of the transport ministry. The government had put the sale of JR Central shares on the back-burner for several years, due to lacklustre revenues and profits at the rail operator. But JR Central reported record revenues and profits for the six months to September 30, as passengers increased due to more frequent Shinkansen bullet train departures. The rail operator increased its full-year net profit forecast to Y89.9bn from a previous Y79.3bn on robust revenue growth. A new bullet train station opened in the key Tokyo business district of Shinagawa in October 2003, which has helped JR Central boost the number of Shinkansen passengers between Tokyo and Osaka, in western Japan. The government is also planning to sell its 1.12m shares in NTT, the former telecoms monopoly, this year. Both the JR Central and the NTT issue will serve as litmus tests of investor demand for government-issued shares. ............. Internet
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