Mizuho to sell up to 6 billion shares in offer: Sources

TOKYO: Japan's No.2 bank, Mizuho Financial Group, will sell up to 6 billion new shares in its planned global offering, four sources with knowledge of the matter said, increasing the total number of shares outstanding by up to 38 percent.

Mizuho had registered last month to raise up to 800 billion yen ($8.93 billion) in a common share issue to prepare for stricter capital requirements, but had held off from launching the offering due to weak market conditions.

An issue of 6 billion shares would bring in a little more than 900 billion yen at the current market price of 151 yen, though the total amount to be raised will be set along with the per share price at a later date. Japan's second-largest bank by assets will hold a board meeting on Friday to decide on the number of shares, among other details, and make an official announcement later in the day, according to the sources, who were not authorised to speak on the record.

Mizuho spokeswoman Masako Shiono declined to comment. Mizuho has been under pressure to boost its capital after Japan's top lender Mitsubishi UFJ Financial Group raised about $15 billion and third-ranked Sumitomo Mitsui Financial Group raised about $20 billion between December 2008 and February this year.

Mizuho raised only $5.7 billion over the same period. As of 0519 GMT, shares of Mizuho were down 2.6 percent at a 2010 low of 151 yen in a broader market down 1.9 percent. The stock has lost about a fifth of its value in the past three months as investors anticipated its need to raise capital.

"The market's initial reaction to the news might be negative, but I don't expect the sell-off to last long," said Naoki Fujiwara, a fund manager at Shinkin Asset Management, adding the stock could bounce back once the details of the offering were made public.

The issue is expected increase Mizuho's Tier 1 capital ratio to a little over 10 percent from 9.09 as of the end of March. Mizuho will decide on a per-share price at a later date based on how its stock price performs, and plans to complete the offering next month, the sources said.