Cerberus To Sell Its 50% Stake In Aozora Bank

Aozora Bank has told media that its majority shareholder Cerberus Capital Management LP will sell some of its holdings in the bank in the planned buyback that was announced by Aozora a month ago and it may also begin selling the remainder in 2012 through the capital market or off-exchange direct transactions.

On August 27, Aozora Bank agreed with the Japanese government to repay public funds in installments over the next decade to push back the mandatory conversion of the preferred shares owned by the Government until 2022. When the government injected public funds into the bank in 1999 and 2000, the state received convertible preferred shares worth JPY 320 billion (USD 4.1 billion), of which JPY 180 billion worth remain outstanding. Aozora announced that it would reduce its capital base from JPY 420 billion (USD 5.4 billion) to JPY 100 billion, buy back about 20% of shares issued and boost its dividend payout from 30% to 40% of earnings.