SoftBank Group Corp. expects to post a gain of more than $34 billion from selling down its stake in Alibaba Group Holding Ltd., cashing in a chunk of its most storied investment to shore up finances as global markets deteriorate.
(Bloomberg) — SoftBank Group Corp.
expects to post a gain of more than $34 billion from selling down its stake in Alibaba Group Holding Ltd., cashing in a chunk of its most storied investment to shore up finances as global markets deteriorate.
The Japanese investment giant’s board approved Wednesday the early physical settlement of prepaid forward contracts corresponding to about 242 million American Depositary Receipts.
After the settlement, which will run from August to September, its stake in China’s e-commerce leader will fall to 14.6% from 23.7% as of the end of June.
Masayoshi Son has this year accelerated the sale of assets, speeding the transformation of his conglomerate into a pure investment house.
Investors have long pressed SoftBank to cash in its shares in Alibaba, monetizing one of the most lucrative bets in venture capital history — and one that made Son’s reputation as a startup investor.
Read more: SoftBank CEO Pledges Sweeping Cost Cuts After $23.4 Billion Loss
SoftBank had previously raised a huge slug of capital by selling forward contracts on Alibaba, taking in $10.5 billion during the June quarter and another $6.8 billion through such contracts on and after July 1.
Physically settling the contracts means SoftBank will relinquish its right to buy back the stock at some point.
In the past, when SoftBank procured funds through its Alibaba stake, the company kept open the option to buy back the shares it released through the forward contracts.
A rare moment when SoftBank committed to lowering its Alibaba holdings was in 2016, when it needed to finance its purchase of chip architect Arm Ltd.
Son is now paring other holdings as he turns his focus to the eventual initial public offering of the British chip design giant.
SoftBank has begun talks to sell asset manager Fortress Investment Group, and is also selling part or all of its 9% stake in SoFi Technologies Inc.
(Updates with details from the release from the second paragraph)
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