eBank to raise Y20 bil by allotting preferred shares to Rakuten
Technology ( 2 )
TOKYO —
Online shopping mall operator Rakuten Inc will invest about 20 billion yen in struggling Internet-only bank eBank, the two Japanese companies said Monday. Based on a capital tie-up deal, Rakuten will buy new shares to be issued by eBank by the end of September.
Through the step, coupled with a separate capital-boosting program, eBank aims to raise its capital ratio to over 20% from 6.42% at the end of June.
The bank has been hit by heavy losses from the financial market turmoil caused by the U.S. subprime mortgage crisis. For April-June alone, the bank incurred a group net loss of 1.7 billion yen in a quarterly earnings report announced Monday.
At a news conference, eBank President Taiichi Matsuo said his bank hopes to bolster its capital, which has been eroded substantially.
The bank decided to form the capital alliance with Rakuten because eBank can expect synergies with Rakuten’s financial services operations, Matsuo said.
In step with the capital alliance, eBank plans to appoint around two Rakuten officials as board members, the bank said.
JCN
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Youdontknow
Isn't this a form of illegal insider trading? How about making the shares available to the general public?
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buggerlugs
It maybe but it won't matter cause the government also owns part so no problem! anyway eBANK has done worse in the past.
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