Japan’s SoftBank Group, the conglomerate owned by billionaire investor Masayashi Son, said on Friday it would reduce its holding of its telecoms company SoftBank Corp, seeking to raise around $14bn (£11bn) selling shares.
“In light of the ongoing uncertainty in the market environment due to concerns about a potential second or even third wave of COVID-19, SBG believes it is necessary to expand cash reserves,” the company said in a stock market filing in Tokyo.
SoftBank Group plans to offer a 21.7% stake of SoftBank corp for sale, reducing its holding down to 40.4% of the Japanese telecoms company.
The offer price for the 1bn shares will be set during the window of 14 to 16 September, SoftBank Group said. Reuters reported that Friday’s closing price in Tokyo would value the stake at around ¥1.47tn ($13.9bn, £10bn).
SoftBank Group said the “strategic importance” of its telecoms business “remains unchanged” and it had “no intention of selling additional SB [SoftBank Corp] shares after the Secondary Offering”.
SoftBank Corp said in a separate filing that the share sale would help to resolve concerns in the market that its parent company was poised to sell its stake. It added it would help stabilise SoftBank Corp’s share price through increased liquidity. Shares in the company have fallen 4.5% over the last week.
“We will take this opportunity to assist the capital markets and our stakeholders in understanding our management policy by better explaining our business strategy,” the company said.
SoftBank Group, which was founded by Son in 1981, grew to prominence as a telecoms and broadband business in Japan in the 1990s and 2000s. However, in recent years Son has separated the telecoms infrastructure and instead focused on investing in next generation technology through its $100bn Vision Fund.
Several high-profile bets made by the Vision Fund have run into trouble over the last 18 months, such as WeWork and Indian hotel business Oyo. The Vision Fund lost $18bn last year, pushing SoftBank Group to a $13bn annual loss.