Rakuten Tackles 800 Billion Yen Bond Maturity with Diversification

Jan 27, 2024 | News On Japan

TOKYO - Rakuten Group has announced plans to diversify the timing of its 800 billion yen bond redemption, which is due by next year. The strategy involves a combination of purchasing some of its existing bonds and issuing new ones, aiming to alleviate the temporary financial burden as the company continues to face losses in its mobile phone business.

Rakuten Group has issued a significant amount of corporate bonds to finance the development of mobile phone base stations and related infrastructure. The company is now facing a redemption of approximately 800 billion yen from this year to the next.

In order to avoid financial turmoil, the company unveiled a plan on Friday to issue new dollar-denominated bonds in the overseas market, maturing in 2027. Funds raised from this issuance will be used to repurchase some of its dollar-denominated bonds due this year in the overseas market. The repurchase amount is anticipated to be up to $1 billion, or just over 140 billion yen. Furthermore, the company plans to repurchase yen-denominated bonds that will mature subsequently.

The company has described this move as part of its efforts to manage the bond redemption schedule, with the goal of spreading out the redemption timing of bonds due next year to reduce the temporary financial burden. Rakuten Group has identified the strengthening of its financial foundation as a key management issue and is urgently working towards making its loss-making mobile phone business profitable.

Source: NHK

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