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Gov't to Complete Sales of NTT Shares

Posted on: Tuesday, 6 September 2005, 12:00 CDT

Sep. 5--TOKYO -- The Ministry of Finance said Monday it will sell 1,123,043 shares in Nippon Telegraph and Telephone Corp. on Tuesday, completing the planned sale of NTT shares held by the government.

The sale will be made in off-hours trading on the Tokyo Stock Exchange as part of NTT's buyback of 1,242,236 of its own shares to prevent the deal from adversely affecting the stock market.

NTT will spend some 600 billion yen on the buyback as it will purchase each share for 483,000 yen, Monday's closing price of its stock on the First Section of the TSE. The value of NTT share sales by the government amounts to 542.4 billion yen.

The telecommunications giant will finance the buyback partly by selling shares in its mobile phone subsidiary NTT DoCoMo Inc.

The 1,123,043 shares are currently held in the government's special account for national debt consolidation funds. After selling the shares, the government will keep 5.2 million NTT shares, or 33.7 percent of all outstanding shares, in the special account for industrial investment, as it is legally required to maintain a stake of at least one-third in the company.

Since the 1985 privatization of the telecom monopoly, the government has so far sold NTT shares on 10 occasions. With the 11th sale Tuesday, the government will have sold a total of 10.4 million shares and will bring 14.48 trillion yen into the state coffers.

Government sales of NTT shares, which began in 1986, initially aroused strong investor demand and sent the price of NTT stock soaring to 3.18 million yen per share in April 1987.

But as the price plunged to 375,000 yen in February 2002, NTT share sales by the government were criticized as throwing a wet blanket on the stock market.

Ahead of Tuesday's deal, Vice Finance Minister Koichi Hosokawa said government sales of NTT shares have "contributed to state finances as a debt servicing source."

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DCM, 9437, NTT, 9432,

Source: Kyodo News International, Tokyo

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