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GE Capital enters Aozora bidding
TOKYO, Japan (CNN) -- U.S. financial institution GE Capital Corp. has begun its bid to acquire a stake of almost 50 percent in Aozora Bank from Softbank Corp., the Nihon Keizai Shimbun reported Thursday. Softbank, the Japanese Internet investor that has scaled back its other businesses to concentrate on broadband, holds 48.87 percent of Aozora Bank, formerly the Nippon Credit Bank. GE Capital is one of four companies that have shown an interest in buying all or part of Softbank's stake. The others are Sumitomo Mitsui Banking Corp., the U.S. investment fund Cerberus Group and Germany's Hypovereins Bank. Softbank shares are 2.75 percent higher at midday Thursday at 1,347 yen, on a day the Nikkei 225 is showing a gain of 1.85 percent. Aozora was bought by Softbank and two other investors, insurer Tokio Marine & Fire Insurance and leasing company Orix, in September 2000 for about 100 billion yen (about $770 million). Tokio Marine and Orix each hold 14.99 percent stakes. Earlier this year, Softbank indicated it would sell its stake to help cut the group's heavy debt load, which stood at $3.7 billion in March. The sale was seen as raising up to $750 million. Changed strategyInitially Softbank founder Masayoshi Son planned to fund start-up companies through loans from Aozora Bank. But Son has changed Softbank's business strategy in the past year and is focused more on broadband rollout for the Japanese market, using ADSL (asymmetric digital subscriber line) technology. Softbank's partner in this strategy is 51-percent held Yahoo Japan, through its Yahoo BB unit. Last December, Softbank announced its U.S. unit, Softbank America, would sell a 3 percent stake in Yahoo! Inc for 39.4 billion yen (about $300 million) to SBC Communications Inc. That would reduce its Yahoo stake from about 20 percent to about 17 percent. In February Softbank announced a further debt-reduction move: the sale by Softbank America of part of its holding in UTStarcom Inc for $214 million, reducing its stake from 42 percent to 32 percent. It said the UTS sale was one of many measures to improve its financial condition.
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