• Kyodo

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The government plans to approve the stock listing of Kyushu Railway Co., which is currently under state control, in fiscal 2016, sources close to the matter said Saturday.

The Land, Infrastructure, Transport and Tourism Ministry is considering giving the go-ahead to the listing now that JR Kyushu is on a firm footing, backed by a solid real estate business despite losses in its mainstay railway operations, the sources said.

The company posted record group sales and net profits in the April-September first half of fiscal 2014.

The railway operator aims to go public by fiscal 2016. Born out of the 1987 breakup of Japanese National Railways, JR Kyushu is now entirely held by the state-backed Japan Railway Construction, Transport and Technology Agency.

The government is likely to submit a bill for the listing to an ordinary Diet session next year.

A focal point in relation to the listing is whether JR Kyushu will be allowed to retain a management stabilization fund of ¥387.7 billion, which was given to the company following the JNR breakup.

JR Kyushu has been using the fund to make up for losses in railway operations. The company seeks to keep the fund, but there are calls within the government for its return upon stock listing.

In the JNR breakup, one freight and six passenger companies were created as the Japan Railways group. Three of them — East Japan Railway Co., Central Japan Railway Co. and West Japan Railway Co. — have already been fully privatized and have not received similar funds.

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