Nomura cash call to raise up to 3.5bn
JAPANESE brokerage Nomura is to raise up to 511bn yen (£3.5bn) in a capital-raising initiative, in an effort to fund overseas expansion and bolster its capital position in advance of international regulatory reform.
The broker, Japan’s largest by sales, launched its second stock sale of the year, after raising 270bn yen in March, taking advantage of the end of a six-month block on raising new funds.
The cash call, which will dilute Nomura’s common stock by 30 per cent, is the company’s largest ever and is expected to aid expansion of its European and US businesses.
Nomura has already ramped up its European operations with the purchase of Lehman Brothers’ European, Middle Eastern and Asian operations, in the wake of the Wall Street bank’s collapse. The purchase helped the firm to a quarterly profit of 11.42bn yen in the quarter to the end of June, its first foray into the black since 2007.
Chief executive Kenichi Watanabe, has also said he intends to build up the firm’s fixed income business in the US, after the company lost out to Barclays in bidding for Lehman’s north American unit.
And his chief operating officer Takumi Shibata, who played the leading role on the Lehman acquisition, said last month of the US fixed income arena that “you cannot afford not to be there”.
The group is planning to add 70 people to its US fixed income unit, bringing total headcount to 200. Some analysts say that Nomura moved early to hoover up any available investor cash ahead of an expected rash of rights issues in Japan.