In an announcement made Thursday, SoftBank Group Corp. disclosed its plans to sell 5% of its stake in its subsidiary SoftBank Corp. as part of the JPY 4.5 trillion (USD 41 billion) asset sale programme proposed in March. The 240 million share deal, which is scheduled to close on 26 May, is expected to raise JPY 310.2 billion (USD 2.9 billion) and will leave the Japanese conglomerate with an ownership stake of 62.1%.
Currently valued at USD 3.1 billion, Softbank Corp. is Japan’s third-largest mobile phone service operator. The telecom company was spun off as a separate subsidiary in 2018.
SoftBank’s asset sale programme also encompasses plans to sell USD 14 billion of shares in Chinese e-commerce giant Alibaba Group Holding Ltd., as well as part of its stakes in T-Mobile US at USD 20 billion over the next 4 quarters. Last week, SoftBank reported a record loss of JPY 1.9 trillion (USD 18 billion) at its giant Vision Fund, resulting in SoftBank’s worst annual loss of JPY 1.4 trillion (USD 13 billion).
Softbank plans to use the proceeds to repurchase shares, reduce debt, and increase cash reserves. “This program will be the largest share buyback and will result in the largest increase in cash balance in the history of SBG, reflecting the firm and unwavering confidence we have in our business,” SoftBank Group Chairman and CEO Masayoshi Son said in a press release. “This will allow us to strengthen our balance sheet while significantly reducing debt. Moreover, the monetisation of assets represents less than 20 percent of the Company’s current asset value.”
Earlier this month, it was also announced that Alibaba co-founder Jack Ma would step down as a Softbank board director on June 25 after 13 years of service. Softbank will move forward with its remaining 10 board members, with plans to nominate 3 new directors.
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