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Japan Post Holdings Co.’s insurance unit plans to buy back about ¥300 billion ($2.9 billion) of shares from its parent, giving the insurer more freedom to expand its business, according to people with knowledge of the matter.

The holding company, which owns about 64% of Japan Post Insurance Co., will sell some shares to shrink its stake to 50% or less, the people said, asking not to be identified because they’re not authorized to discuss the deal before it’s announced.

Japan Post Insurance is seeking to rebuild its business after a sales scandal last year ended with the resignation of senior management and a regulatory penalty. In March, a panel of external lawyers commissioned to investigate the matter said the firm should overhaul its business model and develop products to fit customer needs.

The insurer’s board will meet as early as this month to discuss the buyback, the people said. The company also plans to raise about ¥100 billion in subordinated bonds, Bloomberg News reported earlier this week.

A spokesperson for Japan Post Insurance said nothing has been decided, and declined to comment further. Representatives for Japan Post Holdings didn’t immediately respond to requests for comment.

Japan Post Insurance is currently governed by a strict privatization law, which limits activities such as sales of new products, as well as mergers and acquisitions. Such restrictions will be eased if the holding company’s stake drops to 50% or less.

In a business plan announced last month, Japan Post Holdings said it plans to cut its stakes in its insurance unit and Japan Post Bank Co. to 50% or lower.

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