JERA begins study on US listing as it steps up overseas expansion

TOKYO - JERA, Japan's biggest power generator, has ​begun a feasibility study for a U.S. listing as it explores means of expanding overseas and broadening funding options, said three people familiar with the matter.

The unlisted company, owned by Tokyo Electric Power and Chubu Electric Power, has long viewed the Tokyo Stock Exchange as ‌its primary listing ⁠option but ⁠is now exploring ways to deepen engagement with global investors as it accelerates its international expansion, the people said.

JERA has started examining U.S. ​market conditions, investor demand and regulatory requirements, said two of the people, who all declined to be identified as the matter ​is confidential.


The study is at an early stage and JERA has not made any decisions on details such as timing of an initial public offering, listing structure or market valuation, they said.

JERA has long signalled its intention ​to pursue an IPO to boost capital and corporate value. However, demand ⁠from overseas institutional investors ‌for engagement has increased, prompting it to strengthen outreach, one of the people said.

Reuters ​is first to ​report JERA's considerations of a potential U.S. listing.

JERA declined to comment. Tokyo Electric and ⁠Chubu Electric were not available for comment.

JERA SEEKS TO EXPAND GLOBAL PRESENCE

Japan's ​biggest buyer of liquefied natural gas generates annual revenue of 3 trillion yen ($18.48 ​billion) from assets of around 10 trillion yen. Its domestic power generation capacity is 59 gigawatts, including projects under development, and it supplies the equivalent of about 30% of the country's power.

JERA plans to invest 5 trillion yen from fiscal 2024 through 2035, targeting net profit of 350 billion yen by that point from 183.6 billion yen in fiscal 2025.

The utility, which handles about 35 million metric tons of LNG annually, has been expanding LNG ‌supply chains through upstream investment, fuel procurement and trading, with recent investment and procurement focused on the U.S. It has also been expanding its renewable energy business.

JERA is considering large-scale gas-fired power ​plants in the U.S. ​to help meet surging electricity ⁠demand from data centres, the Nikkei newspaper reported in June, underscoring the growing importance of its overseas operations.

A listing could boost JERA's ability to fund large energy projects and international expansion, while raising its profile among global investors ​and providing stock that could be exchanged in merger-and-acquisition deals.

JAPANESE COMPANIES TAPPING U.S. CAPITAL MARKET

JERA's review comes as a growing number of Japanese firms turn to U.S. capital markets to broaden their investor base as their businesses become increasingly global.

PayPay, backed by SoftBank Group, listed on the Nasdaq market this year, while memory-chip maker Kioxia is preparing to list American depositary shares.

Reuters reported last year that Rakuten Group's Rakuten Card unit was considering a U.S. listing.