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Companies

SoftBank keeps price unchanged for $23bn IPO

Mobile unit shrugs off network disruption ahead of Dec. 19 listing

SoftBank Corp., Japan's third-largest mobile carrier, is scheduled to list its shares on Dec. 19.

TOKYO -- SoftBank Corp. on Monday kept the price for its initial public offering unchanged at 1,500 yen ($13.3) per share, shrugging off a network outage last week that raised fresh concerns over investor appetite.

The decision keeps parent company SoftBank Group on track to raise up to 2.6 trillion yen ($23 billion) by selling part of its stake in the mobile unit, in what is set to be Japan's largest IPO to date. The listing on the Tokyo Stock Exchange is scheduled for Dec. 19.

Japan's third-largest mobile carrier was hit by nationwide disruption on Dec. 6, when millions of subscribers had no service for more than four hours, putting the IPO's lead underwriters in fire-fighting mode to calm investors.

SoftBank said that the incident would have no impact on its earnings forecast for this year or its dividend policy.

Another looming concern is the arrest of Huawei Technologies executive Meng Wanzhou. SoftBank uses Huawei base stations, although the incident on Dec. 6 was caused by faulty equipment supplied by Ericsson.

The pricing puts SoftBank's market capitalization at 7.18 trillion yen ($62 billion), above that of its larger rival KDDI. Of the shares being offered, 90% will be sold in Japan, the bulk of which to retail investors. Many have been lured by the dividend payout ratio target of 85% that SoftBank has set.

Critics, however, have said the price is too high given the sluggish growth in the Japanese telecommunications market and expectations of renewed price competition next year.

The share sale is an important step for group Chairman and CEO Masayoshi Son in his attempts to reduce debt while continuing to invest in next-generation technology companies.

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