Japan's Softbank Tumbles Deeper Into Red
Friday November 12, 1999
By Yuko Inoue
TOKYO (Reuters) - Japan's Softbank posted a six-month loss for a second straight year Friday, hit by losses from the sale of a U.S. unit, but the high-flying Japanese Internet investor also announced plans to take over a failed bank.
Softbank Corp said it posted a consolidated current loss of 11.3 billion yen ($107 million) for the six months to September 30, after a 2.36 billion yen loss a year before.
Earlier on Friday the firm confirmed it filed a preliminary proposal to take over Nippon Credit Bank (NCB) in a joint bid with three other blue-chip firms --- Ito-Yokado Co, Orix Corp (NYSE:IX) and Tokio Marine & Fire Insurance Co.
Softbank has said it wants to move into Internet-based banking either in cooperation with existing banks or by acquiring a conventional lender.
High-Flying Stock Gets Fuel
News of the bid for failed Nippon Credit sparked fresh buying in the shares of Softbank, one of the best-performing issues on the Tokyo Stock Exchange.
After touching a record intraday high of 61,200 yen, Softbank eased back to 61,000 by 0630 GMT, up 6.27 percent on the day.
NCB was put under state control last December as it struggled with massive debts and deteriorating creditworthiness. It was the second big Japanese bank to be nationalized under government efforts to clean up the country's ailing financial sector.
In June, NCB appointed Morgan Stanley Dean Witter & Co (AMEX:APP) as a financial adviser to help it find a buyer for its operations.
NCB can continue ordinary banking operations, but under a plan drafted by regulators its healthy assets are to be sold to a sound financial institution within three years.
Softbank, which has invested in up to 150 Internet-related companies, mostly in the United States, said in July that it would shed the group's non-Internet stock and would sell memory-module maker Kingston for $450 million.
The sale would lead Softbank to incur a 72 billion yen loss this business year to March, the company said.
Softbank -- In Japan's Top 10
The second consecutive current half-year loss comes amid a stunning rise in Softbank's stock price.
The stock, one of Japan's few Internet plays, is trading at about eight times its level 10 months ago.
The company did not issue consolidated forecasts for the full business year, citing uncertainties surrounding exchange rates and earnings by a U.S. Internet-related investment fund.
The group posted a 15.45 billion yen loss in the last business year ended on March 31 hit by dismal earnings at U.S. publishing unit Ziff-Davis Inc (NYSE:ZD).
Softbank this week elbowed its way into Japan's top 10 firms in terms of market capitalization, just five years after floating its shares. It has overtaken global household names like Honda Motor Co and consumer electronics giant Matsushita Electric Industrial.
($1-105 yen)
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