SoftBank divests USD2.2bn worth of Alibaba shares; targets Vision Fund kick-start

20 Jul 2020

Japanese conglomerate SoftBank Group Corp has sold a further USD2.2 billion worth of shares in Chinese multinational technology company Alibaba Group Holding, as part of its strategy to raise funds to reduce its debt and buy back its own shares. Bloomberg reports that the deal – the details of which were quietly disclosed in its year-end financial filing, but have not been reported – is expected to be settled between May 2024 and June 2024, marking the latest phase of the ‘unwinding of a relationship between the two companies that spans two decades’. This year, Masayoshi Son’s Tokyo-based company has already sold off Alibaba shares worth USD13.7 billion.

As reported by CommsUpdate, earlier this month SoftBank disclosed that it bought back JPY101.7 billion (USD948.5 million) worth of its common stock between 17 June and 30 June 2020 – pursuant to the JPY500 billion repurchase authorisation resolution made by the Board of Directors on 15 May 2020. The stock buyback – comprising more than 18.7 million shares – forms part of a massive capital reallocation programme announced by the tech investment group in March that includes offloading most of the group’s stake in wireless carrier T-Mobile US, a portion of its 26% stake in Alibaba Group, and some of its shares in its Japanese operating division SoftBank Corp.

In a separate development, meanwhile, the Nikkei Asian Review reports that SoftBank is looking to raise money from individual investors to its faltering Vision Fund venture, but notes that its ambitions may not reach fruition any time soon ‘because of strong headwinds facing the Japanese technology conglomerate’. Nonetheless, the significant obstacles are not daunting one of Japan’s leading securities companies, Nomura Holdings, which the Nikkei claims is holding secret discussions with SoftBank’s management team in preparation for when the situation improves.

Japan, SoftBank Group Corp