GMO Internet to reduce stake in GMO Payment Gateway

Japanese online services provider GMO Internet Inc. (TYO:9449) plans to reduce its shareholding GMO Payment Gateway, Inc. In an announcement published earlier today, GMO Internet said it will sell 7,200,000 common shares or 9.7% of the total number of voting rights in GMO-PG. The sale will be conducted via over-the-counter (OTC) transactions with SMBC Nikko Securities Inc, which will resell the stock immediately after the transfer of the stock.

Regarding the purpose of the sale, GMO Internet explained that it reflects the necessity to enhance the financial base further by being cash-rich and maintaining an appropriate capital level. Taking into account various points, including the market value of assets and liquidity, GMO Internet has made the decision regarding the transaction.

Although GMO Internet’s ratio of voting rights of GMO-PG will decrease from 51.7% to 42% due to the transaction, GMO-PG will remain a consolidated subsidiary of GMO Internet.

GMO Internet expects to record an extraordinary profit (gain on sales of shares of subsidiaries and associates) on individual accounts due to the sale of shares in FY2018. However, since GMO-PG will still be GMO Internet’s consolidated subsidiary on the consolidated accounts, and despite capital reserve fluctuations, the transaction will have a limited impact on the consolidated results.

GMO Internet has been expanding and reorganizing its business portfolio over the past several months. In September this year, GMO Internet unveiled its plans to sell a part of its stake in its subsidiary GMO Financial Holdings Inc (TYO:7177). As a result of the transaction, GMO Internet will still hold more than 50% of the total number of voting rights of GMO Financial Holdings.