Mizuho to raise up to $7.2 bln from share offer

Mizuho Financial Group Inc., Japan's third-biggest bank by market value, will raise up to 693 billion yen ($7.2 billion) from selling new shares to repair its balance sheet after suffering big losses last fiscal year.

Mizuho said Wednesday it is offering 2.8 billion of common stock with an over-allotment option of almost 200 million shares. The price will be set between July 15-17, the Tokyo-based bank said.

The lender joins its bigger rivals in turning to investors for help after bad loans and steep equity losses triggered by the global financial crisis weakened their capital footing. Last month Sumitomo Mitsui Financial Group Inc. set pricing levels for its upcoming stock offering, which could bring in more than 920 billion yen.

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Mizuho posted a group net loss of 588.8 billion yen ($6.1 billion) in the last fiscal year through March 31.

Capital strength will be a "key issue" for management because "it has become increasingly important for financial institutions to maintain a sufficient capital base amid a prolonged stagnation of both domestic and overseas economies," Mizuho said in a statement.

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In trading Wednesday, shares of Mizuho rose 2.2 percent to 231 yen. Mizuho's announcement came as no surprise to investors, who had been tipped off by news reports earlier this week.

The offering will increase the number of common shares outstanding by 27 percent.