U.S. investment company Ripplewood buys Japan Telecom's fixed-line
Posted on: Thursday, 21 August 2003, 06:00 CDT
TOKYO (AP) -- The U.S. investment company Ripplewood Holdings LLC will acquire a subsidiary of Japan's third-largest telecommunications company for about 260 billion yen (US$2.20 billion) in a leveraged buyout, the companies said Thursday.
New York-based Ripplewood, which made headlines three years ago when it became the first foreign investor to buy a Japanese bank, will purchase the fixed-line business of Japan Telecom Holdings Co., which is controlled by Britain's Vodafone Group PLC. Ripplewood arranged debt financing from 11 banks including Citibank and JP Morgan.
The high-profile deal could stimulate the small but growing market in Japan for mergers and acquisitions, long discouraged by this country's conservative corporate culture.
Ripplewood is reportedly eyeing Japan Telecom's fixed-line business as a platform to develop high-speed broadband Internet services. Newbury-based Vodafone, which owns 66 percent of Japan Telecom Holdings, wants to concentrate on Japan's lucrative mobile phone market.
Under the terms of the agreement, Japan Telecom Holdings will receive 261.3 billion yen (US$2.21 billion), of which 32.5 billion (US$275.4 million) will be in redeemable preferred equities and the rest in cash.
Japan Telecom posted a profit of 79.5 billion yen (US$673.6 million) for the fiscal year ended March 31, reversing a loss of 66 billion yen.
Its fixed-line business has struggled in the face of competition from NTT Corp., a former government monopoly, and KDDI Corp., the first company to jump into Japan's long-distance market after deregulation.
But Japan Telecom's mobile phone unit, J-Phone, is growing fast thanks in part to a popular service that allows users to e-mail photos with handsets embedded with tiny cameras.
Operating revenue climbed 8 percent to 1.46 trillion yen (US$12.3 billion) last year.
Analysts say Vodafone needs capital to invest in new technology and expand its mobile business in Japan, where a unit of NTT, NTT DoCoMo, controls 60 percent of the market.
Ripplewood has bought up a string of struggling Japanese companies over the last few years as turnaround projects. It led an international consortium that bought the failed Long-Term Credit Bank of Japan -- now known as Shinsei Bank -- in June 2000. Other acquisitions include a resort operator in southwestern Japan, a record company and an auto parts maker.
Related Articles
- 50 Largest Wired Telecommunications Carriers in the US Hold 90 Percent of the Market
- SEPTA's Broad Street and Market-Frankford Subway-Elevated Lines Converge Along Mummers Parade Route
- In Hong Kong, at the Start of 2006, the Territory Had Almost 3.8 Million Fixed Telephone Lines in Service, Giving a Teledensity of Around 54% - 2006 North Asian Telecoms Statistics and Market Overview
- Wireless LAN Switch Sales Drive Enterprise Growth in 2Q05, According to Dell'Oro Group; SOHO WLAN Market Up 24 Percent Year-Over-Year
- Japan No. 2 Telecom Reports Higher Profit
- World Server Market Revenue Up 5.3 Percent in First Quarter
- According to Dell'Oro Group, Storage Area Network Fibre Channel Market Grows 10 Percent in First Quarter 2005 Compared to Prior Year Period; Cisco Gains Share in the Modular Switch Segment
- Optical Transport Market Grows Seven Percent Year Over Year According to Dell'Oro Group; Optical Revenues in Europe, Middle East and Africa Surge 27 Percent
- Softbank to Buy Japan Telecom From Ripplewood for 340 Billion Yen
- Ericsson sells France Telecom Perpetual Convertible Bond holding of EUR 456 million
 |
 |
User Comments (0)
RSS Feeds