Factbox-Rakuten Group’s losses, debt burden and financing efforts

TOKYO (Reuters) – Rakuten Group is a Japanese conglomerate centred on an e-commerce website – Rakuten Ichiba – and a suite of online financial services companies including banking, credit card, securities and insurance arms.

Here are some details about its deeply troubled mobile business, the group’s operating losses, debt burden and its efforts to shore up its finances.

RAKUTEN MOBILE

Japan’s No. 4 mobile network was launched in April 2020. As of Sept. 30 it has 5.2 milion subscribers and about 2.5% share of the world’s third-largest telecom market. It had 351 billion yen ($2.4 billion) in annual sales last year and accounts for 18% of Rakuten’s overall revenue.

DEBT AND LOSSES

The mobile unit’s build-out costs spiralled, financed largely by corporate bonds. Rakuten Group currently has total debt of more than 1.5 trillion yen, of which 800 billion yen is due to be redeemed by the end of 2025.

Rakuten has posted 13 straight quarters of operating losses due to its troubled mobile unit, resulting in cumulative losses for the group of 819 billion yen ($5.5 billion).

The mobile unit’s worst quarter was the first quarter of 2021 when the unit had an 132 billion yen operating loss. In the latest quarter, it logged a loss of 81 billion yen.

RAKUTEN’S FUNDRAISING EFFORTS

March 2021 – gains 242 billion yen from selling new shares and treasury stock. This included the sale of an 8.32% stake to Japan Post Holdings. Other investors included Chinese tech conglomerate Tencent and Walmart.

Nov 2022 – sells 19.99% of Rakuten Securities to Mizuho Securities for 80 billion yen.

May 2023 – sold its stake in Japanese supermarket chain Seiyu for 22 billion yen three years after agreeing to buy the shares from Walmart.

May 2023 – raises 296 billion yen selling new shares in both a public offering and third party allotment to a group of companies, including some owned by Rakuten CEO Hiroshi “Mickey” Mikitani.

April 2023 – made 71.8 billion yen from the initial public offering of Rakuten Bank, marking Japan’s largest IPO since 2018. The listing reduced Rakuten’s stake to 63.3%.

Nov 2023 – sells a further 29% of Rakuten Securities to Mizuho Securities for 87 billion yen.

($1 = 148.32 yen)

(Reporting by Anton Bridge; Editing by Edwina Gibbs)