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US Ripplewood Holdings to buy Vodafone's Japanese fixed-line business21/08/2003. Source: AltAssets. 
 US private equity firm Ripplewood Holdings has confirmed that it is to buy Vodafone's Japanese fixed-line operations for Y260bn. The transaction represents Japan's largest ever leveraged buy-out.
The transaction is expected to be financed with as much as 80 per cent debt, according to a report by Reuters. This level of leveraged financing is extremely unusual for highly risk-averse Japanese banks and is likely to have been encouraged by near record level two per cent fees.
The deal will allow Vodafone to steer away from Japan's landline market, which has been hit by structural changes in the fixed line business, as well as a price war and an exodus of users to mobile phones. Instead the firm will focus on its Japanese mobile operations, which generates the group's highest per-user revenue.
Japan has been a driving force behind the emerging private equity business in Asia. Private equity firms raised a total of $1.5bn in new capital to target Asian companies in the first half of this year, bringing total funds to $93.2bn,according to Asia Venture Capital Journal.
The sale of Vodafone's fixed line operations and the willingness demonstrated by Japanese banks to finance the transaction, may well spur further private equity activity in the region.
Copyright © 2003 AltAssets
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