SoftBank Starts Asset Offloading With $21 Billion T-Mobile Stock Sale

SoftBank has now kick started its program for sale of assets as the Japanese firm has announced earlier, as the firm started offloading its stake in T-Mobile.

The plans of the Japanese tech conglomerate is to sell off more than 198 million shares of stocks of T-Mobile with is worth a total of $21 billion, the firm said on Tuesday.

This offloading of its holding stocks in various tech companies is a part of the larger plans of SoftBank founder and CEO Masayoshi Son’s efforts to raise money from such sale to reduce the huge debt of the company and to shore up cash in the face of the huge economic impact of the novel coroanvirus pandemic particularly on the large portfolio of global tech companies in the kitty of SoftBank.

“Given the current situation where there is a concern for a second and third wave of spread of COVID-19, (SoftBank Group) believes that it needs to further enhance its cash reserves,” the company said in a statement.

In a surprise announcement made by SoftBank in April, the Japanese conglomerate said that it would be selling off $41 billion worth of assets and the funds that would be generated would be used to purchase back shares and cut down on its accumulating debt. That announcement by the firm was made in the backdrop of SoftBank reporting historic operating losses for the year, primarily dragged down by the poor performance of its Vision Fund and affiliated funds. Further, the dramatic fall in the valuations of tech companies such as Uber, WeWork and other portfolio companies because of the pandemic had also contributed to the losses incurred by the firm.

The proposed volume of sale of stake by SoftBank in T-Mobile is equivalent to almost two thirds of the total stake that the Japanese investment firm has in the American telecom carrier. After the completion of the planned sale of stake, SoftBank will retail about 9 per cent of the stakes in the carrier.

About 134 million of the total number of its shares in T-Mobile that SoftBank plans to offload will be made available for purchase for the public, T-Mobile said in a statement. According to a regulatory filing with the US Securities and Exchange Commission, 5 million shares will be purchased by Marcelo Claure, SoftBank’s chief operating officer and a T-Mobile board member.

The announcement of the sell off resulted in a 1.6 per cent drop in the shares in T-Mobile in extended trading. On the other hand, shares of SoftBank rose by as much as 3 per cent in Tokyo, before losing out some of those gains. They were last trading up about 1 per cent.

(Adapted from CNN.com)

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