SoftBank Group Corp on Friday announced that it was proposing to cut its stake in its Japanese wireless business as part of a long-planned share divestment valued at nearly $14 billion, as the group ensures it has enough liquidity to steer itself during the crisis.
The sale is seen to be finalized late this month and will comprise over 927 million shares in the Japanese telecoms division, setting the stage for an expansion of the company's asset sales. SoftBank Group settled at 1,431.5 yen at the bell, Friday.
Masayoshi Son, SoftBank Group CEO, has been unloading a good chunk of the company's fundamental assets to normalized its ledgers and finance a record share reacquisition in the wake of the ongoing global health crisis. The share sale will see the company's investments trimmed down from 62 percent to around 40 percent.
The Tokyo-headquartered mother company disclosed that it will dispose of around 927 million shares via a secondary global bid, which is around 35 percent of its ownership. The carrier's stock will be offered at a marked-down price of 3 percent to 5 percent. In a separate arrangement, the wireless division said it will buy back nearly 1.7 percent of its shares for roughly 100 billion yen.
In a statement, Softbank Group said in the face of doubts in the global market brought about by the coronavirus pandemic, the company believes it must expand its financial reserves. It added the group will keep the remaining stocks for the medium or long term. Son has established the company into a major wireless entity but has turned its sights to tech investing recently.
Son said the share proposition will have no bearing on its business ties with SoftBank Group Corp and that the company's strategic value to the entire SoftBank organization "remains unchanged." Son added that the share offering will be equally divided between Japanese and global offerings.
SoftBank Group had previously disclosed moves to divest approximately 4.5 trillion yen in key assets and has stated that the sale process was nearly complete. Son has used the proceeds of the sale to settle the company's debt and pursue a 2.5 trillion yen buyback.
SoftBank also said it was looking to unload around 223.5 million shares to international financiers in Asia and Britain, with an extra allocation of 33.5 million shares. Canada and the United States will not be included in the planned share sale. Meanwhile, local investors will be granted 670.5 million shares.
