Japan will sell the Tokyo Metro in a bid to raise $2b for the rehabilitation of the Fukushima region.

Tokyo Metro Co., which runs the majority of the metro system in the Japanese capital, is preparing to go public. This is a significant attempt at privatization on Japan’s part, as it looks to capitalize on a stock market that has surged to 34-year highs.

The Tokyo government owns the remaining 53.4% of the corporation, and it will go public in the April-starting fiscal year.

According to a 2022 government document outlining preparations for the offering, half of the corporation is scheduled for sale, with each country planning to sell half of its holdings.

The finance ministry estimated in 2022 that a Tokyo Metro IPO may bring in roughly 300 billion yen ($2 billion). On Friday, no revised guidelines about the desired fundraising amount were provided.

The enormous 2011 earthquake that rocked the Fukushima region and other areas of northeastern Japan caused significant damage. The federal government intends to use the money from its share of the sale to support reconstruction efforts.

Over a 195-kilometer network of rails, the railway operator transports 5.95 million passengers daily on average. During the April-September quarter, it reported revenues of 40.4 billion yen and a net profit of 24.2 billion yen.

The government’s recent revamping of a tax-free stock investing scheme makes private investors likely to be drawn to the IPO, according to Tokai Tokyo Research Institute chief equity market analyst Seiichi Suzuki.

“Tokyo Metro is also a public transport system, which is an easy stock for individual investors to buy into,” Suzuki stated. “The company’s business is sustainable.”

In the budget for the next fiscal year, the Tokyo government has allocated 3.6 billion yen for expenses associated with share sales, as disclosed in a document on Friday.

One government official in Tokyo stated that the money is set aside for underwriting costs.

When asked about a more precise date for the listing, Tokyo Governor Yuriko Koike said to reporters, “We’ll be discussing the specifics with the relevant parties in the future.” For the subway’s IPO in 2022, the Japanese government selected five brokerage firms: Mitsubishi UFJ Morgan Stanley, Nomura, Mizuho, Goldman Sachs, and Bank of America. Since the coronavirus pandemic, it has been postponed.