Cerberus Capital to sell controlling stake in Japan's Aozora Bank for $2.5 bn

Cerberus Capital Management is planning to sell its entire 55 per cent stake in Japan's Aozora Bank Ltd, which may fetch the US private equity firm around $2.5 billion.

Shares of the Tokyo-based bank, controlled by Cerberus, fell by as much as 13 per cent in midday trading after the lender disclosed the stake to be sold in a filing with the Tokyo Stock Exchange.

Cerberus plans to sell part of its 821 million shares in Aozora in a share buyback plan that the bank is launching, while it will sell the remaining in the market or through a private transaction as early as this year, Aozora said in the filing.

The sale may fetch the New York-based private equity firm, which took control of Aozora in 2003, around $2.5 billion at current market prices.

Cerberus had acquired the stake from Softbank for 101 billion.

With about $463 million in bank loans, Aozora was the largest unsecured creditor to bankrupt Lehman Brothers.