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Stocks

Line going for double IPOs in Tokyo, New York

TOKYO -- Line, the provider of the namesake online chat application, is gearing up for simultaneous stock listings on the Tokyo Stock Exchange and the New York Stock Exchange in mid-July, The Nikkei learned Thursday.

This will be the first simultaneous IPOs by a Japanese company involving the NYSE. Both bourses are expected to approve Line's stock listing on Friday.

The Tokyo-based company likely will raise roughly 100 billion yen ($938 million) from the stock offerings. It aims to use proceeds to expand its operations in Thailand, Indonesia and elsewhere in Asia, as well as to improve and expand services for smartphone users.

With its market capitalization estimated to reach around 600 billion yen, Line's stock offerings would be bigger than any IPOs that have taken place in the U.S. or Japan so far this year. The company has chosen Nomura Securities and Morgan Stanley as the lead managers for its IPOs.

Line is a subsidiary of major South Korean IT firm Naver, whose shares are listed on the Korea Exchange. The parent will retain its roughly 80% stake in Line even after the double IPOs, since it will not be parting with any of its shareholdings in the Japanese unit.

Aside from Japan, Line's chat app is highly popular in Taiwan, Thailand and Indonesia. The company plans to hire local talent and seek M&A opportunities in those countries. Leveraging Line's user base of more than 200 million people, the company has been tying up with companies that provide such services as funds settlement and parcel delivery.

Line plans to use some of the IPO proceeds to develop new services for smartphones to aid its planned entry into the low-priced-smartphone business.

The company derives slightly more than 30% of its revenue from games, cartoons and other digital content. Advertising brings in about 30%, and the communications business, which includes digital stickers for use in the Line chat app, roughly 20%.

Line reported a net loss for the year ended in December, due to losses stemming from its partial withdrawal from the online music distribution business. It forecasts a return to profitability in the current year, thanks to growth in the advertising segment.

(Nikkei)

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