J-Power sets $3.4 billion IPO, to list on October 6

Electric Power Development Corp (J-Power), Japan's biggest power wholesaler, got the go-ahead on Friday for a 371 billion yen ($3.4 billion) initial public offering, marking the world's second biggest IPO this year and the latest in a raft of Asian power privatisations.
J-Power's owners - the government and private power firms - will offer all 138.8 million outstanding shares, with a quarter allotted for overseas investors, the Tokyo Stock Exchange said.
J-Power is owned 83 percent by the government, while power companies hold the rest.
Underwriters used an assumed offering price of 2,670 yen per share and set an stock market debut date of October 6 for Japan's biggest IPO in six years. They will decide a tentative price on September 13 and finalise pricing on September 27.
J-Power's listing comes as Japan, which has the biggest public debt burden of any industrialised country at 140 percent of GDP, sells assets to help curb its debt issuance and moves to deregulate its power industry.
J-Power, Japan's seventh biggest power utility, was set up in 1952 and operates 67 power plants with total generating capacity of 16,375 megawatts - enough to light up the whole of Malaysia.
The government transferred its 83 percent holding to a privatisation fund late last year at 2,400 yen per share, valuing J-Power at 333 billion yen ($3.04 billion). But the state-run Development Bank of Japan, one of the shareholders in the fund, has said the IPO would value J-Power at up to 400 billion yen.
The move would mark the largest IPO by a Japanese company since NTT DoCoMo's $18 billion global listing in 1998.
But it has also raised concerns about the ability of the market to absorb such a huge offering at a time when the economy is showing signs of slowing.
"I cannot rule out the possibility that an IPO of this magnitude could ruin the market," said Takashi Miyazaki, senior strategist at UFJ Partners Asset Management.
The biggest IPO in the world so far this year was an offering valued at $4.4 billion by Belgian telecoms group Belgacom SA, according to research firm Dealogic.
J-Power consolidated net profit rose 33 percent to 27.6 billion yen in the last business year while revenue fell 2.4 percent to 569.9 billion yen.
At the assumed offering price, J-Power would trade at a price to earnings ratio of 13.4.