Rakuten to sell new shares to shore up capital

Rakuten Group has announced it will offer new shares in a bid to raise more than 2 billion dollars.

The Japanese e-commerce giant is trying to strengthen its financial footing, which has been shaken by its entry into the mobile-phone business.

Rakuten has been setting up base stations throughout Japan since its full-scale entry into the industry in 2020.
But the project has racked up costs in excess of 7 billion dollars, depleting the company's finances.

Rakuten Group says it had a net loss exceeding 600 million dollars in the first quarter of this year. That marks the fourth-straight year of red ink in the January-to-March period.
From next year, the company will also need to repay large amounts of corporate bonds that it issued to help finance the base-station push.

Rakuten hopes to postpone some of its investment plans for facilities and equipment through a new roaming contract signed with major telecom firm KDDI. The deal allows it to use KDDI's networks in Tokyo and other big urban areas.

The company says there will be a third-party allotment. That means a portion of the shares will be offered to designated investors, including IT firm CyberAgent and major railway operator Tokyu.

An asset-management firm owned by Rakuten Group Chairman and CEO Mikitani Hiroshi would be one of the firms handling the deal.