Daily Management Review

SoftBank to sell its stake in Alibaba for $14B


Japanese SoftBank Group plans to sell its stake in the Chinese e-commerce giant Alibaba Group for about $ 14 billion, Bloomberg reports citing sources familiar with the Japanese company’s plans.

MIKI Yoshihito
MIKI Yoshihito
The Japanese corporation can gain from $ 12 billion to $ 15 billion for a stake in Alibaba, the agency said. In total, SoftBank needs $ 41 billion to support its business affected by the coronavirus pandemic. Masayoshi Son, founder of SoftBank, announced plans to sell assets on March 23 in Tokyo, but did not specify which assets would be sold. The stake in Alibaba (the company is valued at more than $ 120 billion) makes up the largest part of SoftBank's market value.

The Japanese company’s funds will be needed to repurchase shares and reduce debt in order to alleviate the problems of investors who dumped more than 40% of SoftBank's market value from its February peak. The company manages a $ 100 billion Vision Fund, vulnerable to economic shocks due to the debt burden and loss-making startups. Vision Fund's investments are related to shared economy projects, which have been hit hard by the coronavirus pandemic.

Funds attracted from the sale of assets, including its subsidiaries, will allow SoftBank to buy back shares and reduce debt. According to Bloomberg, this is the amount equivalent to the entire market value of SoftBank last week. Part of the proceeds from the sale will go to a new share buyback program in the amount of 2 trillion yen. SoftBank shares rose 21% in Tokyo on March 24, this is their biggest intraday gain since the listing. Alibaba's US depositary receipts fell 2% after being published on Bloomberg, the agency adds.

source: bloomberg.com