Financial Services Agency Commissioner Shokichi Takagi indicated Monday the government wants to sell its preferred shares in Shinsei Bank at the highest possible price to retrieve some of the public funds injected into its failed precursor.
Asked about the timing of unloading the government-held shares in the newly listed bank, Takagi said, “The stock price is one of the factors, and the bank’s efforts to lead its businesses to more sound footing is also important.”
Shinsei made a dramatic debut Thursday on the Tokyo Stock Exchange with its initial quote at 872 yen per share, far higher than the initial public offering price of 525 yen. On Monday, it closed at 787 yen.
The government appears poised to convert into common stock preferred shares it has in the bank, worth a total of 370 billion yen, and sell them to retrieve part of the 7.8 trillion yen worth of public funds injected into the failed Long-Term Credit Bank of Japan, Shinsei’s predecessor.
The government obtained the preferred shares in the bank on two separate occasions, in March 1998 and April 2002.
LTCB was put under government control in 1998 before being sold to a foreign investment consortium.