Japan’s largest supermarket operator, AEON, said yesterday (17 October) that it plans to raise capital of JPY200bn (US$1.7bn) by issuing new shares to fund its expansion plans.

The company said that the cash would be used to fund its planned capital tie-up with struggling Japanese retailer Daiei and to expand its retail operations in Japan and China.

Last week, Aeon commenced exclusive negotiations with the Marubeni Corporation, which owns 44.6% stake in Daiei, regarded the sale of 15% of Marubeni’s Daiei shares. Aeon is also expected to take about 20% of Daiei’s stake in smaller retail rival Maruetsu. 

The public offering will be equivalent to approximately 10% of Aeon’s market capitalisation of more than JPY2trn. Aeon will issue 70m shares through a public offering next month, while a third party allotment will see Nomura Securities take 6.3m shares, the company said.