Japan Telecom Holdings Co., a unit of British wireless giant Vodafone Group PLC, said Wednesday it is in talks with several firms, including U.S. investment fund Ripplewood Holdings LLC, over the sale of its fixed-line subsidiary, Japan Telecom Co.
But no decision has been made yet, the Japanese telecom firm said in a brief statement.
According to sources, Vodafone intends to sell Japan Telecom, the nation’s third-largest fixed-line carrier, for around 300 billion yen.
Last year, Vodafone tried to sell Japan Telecom to Tokyo Electric Power Co., but the deal broke down due to differences over terms of the sale.
The British firm then approached Ripplewood, which has been actively investing in distressed Japanese companies.
If the deal with Ripplewood goes through, it would be one of the largest investments in Japan by an overseas investment fund.
Ripplewood has purchased various Japanese assets, including the former Long-Term Credit Bank of Japan, now Shinsei Bank; the former Nippon Columbia Co., now Columbia Music Entertainment Inc.; and the Seagaia resort complex in Miyazaki Prefecture.
Earlier in the day, the business daily Nihon Keizai Shimbun reported that Vodafone and Ripplewood are expected to close the deal for a sum believed to be in excess of 300 billion yen.
Under the most probable scenario, Ripplewood would buy all outstanding Japan Telecom shares, while Vodafone would assume Japan Telecom’s interest-bearing debt, totaling 150 billion yen, the paper said.
Vodafone plans to keep just one Japanese telecom unit, J-Phone Co., under its umbrella to concentrate on the cell phone business, and merge J-Phone with Japan Telecom Holdings, the daily said.
Vodafone will use the proceeds from selling Japan Telecom to pay off some debt and strengthen the third-generation mobile phone business and camera-equipped mobile phone services, among other pursuits, in a bid to counter industry leader NTT DoCoMo Inc., the newspaper said.
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