TOKYO (Reuters) -Japanese e-commerce and fintech conglomerate Rakuten Group Inc will raise up to 294.2 billion yen ($2.18 billion) by issuing new shares, it said on Wednesday as it works to offset the financial impact of losses at its mobile business.

Rakuten said it will raise up to 252.5 billion yen via a public offering and another 41.8 billion yen through allocations to founder and CEO Hiroshi Mikitani, his asset management firm, CyberAgent Inc and Tokyu Corp.

Rakuten set the price at 566 yen per share with the offer to launch May 31. The group's shares closed down 2% at 584 yen on Wednesday ahead of the announcement.

Mikitani originally outlined plans to become Japan's fourth major mobile carrier, promising to create a low-cost nationwide network by using cloud-based software and commoditised hardware.

However, the company has spent cash funding the build-out, and analysts have said Rakuten is struggling to take market share from cash-rich incumbents known for high-quality networks.

Rakuten said it will use the funds to repay interest-bearing debt and to finance its mobile business.

To raise capital Mikitani has already sold shares in its core business, floated the group's banking unit and said it planned to do the same for its securities business.

($1 = 135.0500 yen)

(Reporting by Mariko Katsumura, Kiyoshi Tanaka and Sam Nussey; editing by Jason Neely, Toby Chopra and Barbara Lewis)