Softbank Group Selling Japan Telecommunications Unit

Masayoshi Son’s SoftBank Group plans to sell about $12.5 billion shares of its Japan telecommunications unit to increase its cash reserves. The sale will likely take place in September.

SoftBank Group plans to sell about 927 million shares of its Japanese telecom unit, known as Softbank Corp, through a global secondary offering. The share sale will likely happen between Sept. 14 and Sept. 15. The sale will lower SoftBank Group’s stake in the telecoms firm from 62 percent to 40 percent. The parent company doesn't have any intentions to lower its stake more.

SoftBank Group cited ongoing uncertainty amid the coronavirus pandemic. The company expressed concerns about a potential second wave of COVID-19.

In March 2020, SoftBank Group committed to sell assets and raise cash. Initially, SoftBank planned to raise about $41 billion. The current stake sale is a surprise. The company was close to meeting its goal of $41 billion. However, SoftBank Group said that it needs to expand its cash reserves beyond the goal of $41 billion to “ensure flexible options to respond to changes in the market environment.”

According to The Wall Street Journal, “Since March, SoftBank has sold or contracted to sell big chunks of its holdings in SoftBank Corp., China’s Alibaba Group Holding Ltd. and the merged T-Mobile, raising around $40.5 billion, not including the share sale announced Friday.” SoftBank Group is also considering a sale or IPO of U.K.-based Arm Ltd., which it acquired for $32 billion.

SoftBank Group has used the sale proceeds to pay down debt and repurchase its shares. The company posted net debt of about $94 billion as of June 30 compared to $136 billion a year ago.

SoftBank Group stock is listed on the Tokyo Stock Exchange under stock code 9984. On Aug. 28, SoftBank Group stock closed 3.3 percent lower at 6,397 Japanese yen. The stock has risen by 2.2 percent in the last five days. However, the stock has risen by 32.6 percent in the last year.

SoftBank Group stock is trading 9.6 percent below its 52-week high of 7,077 Japanese yen and 145.1 percent above its 52-week low of 2,610 Japanese yen. So far, the stock has increased by 34.5 percent in 2020.

Masayoshi Son is SoftBank Group's founder and CEO. He's also the chairman of U.K.-based semiconductor company Arm Holdings. Son is known for his $20 million investment in Alibaba in 1999. According to Forbes, Son’s current net worth is $30.5 billion.