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The group’s push to raise money to pay off debt and buy back shares has been relentless in recent months, but it seems the process is far from over
As a group, SoftBank has been hit hard by the coronavirus pandemic. Many of their investments, such as into the hotel chain Oyo, have seen a dramatic loss in value during the crisis, leaving SoftBank in something of a crisis of its own.
Back in March, CEO Masayoshi Son began a $41 billion programme of asset sales to help dramatically reduce its debt and buy back shares.
The scale of this sale cannot be underestimated. In June, the company announced it would divest $21 billion worth of stock in T-Mobile US, around two-thirds of its holdings in the newly merged company. Later, in July, it was announced that influential UK-based chip company Arm would be on the chopping block, with much speculation surrounding a potential buyer.
Now, it has become apparent that even SoftBank’s own telco unit will not be spared, with the company today announcing that it was looking to offload $12.5 billion shares this September. This sale would represent around drop in ownership of around 20%, from 62.1% to 40.4%.
All of these sales combined would certainly top the initial plans to raise $41 billion, but it seems the company could be erring on the side of caution, given that a second wave of the virus could be just around the corner.
In a statement, SoftBank Group said that "the ongoing uncertainty in the market environment due to concerns about a potential second or even third wave of COVID-19."It also noted that the additional cash raised would serve as a reserve, allowing them to be react more flexibly to changes in the market.
The Group insists that this partial sale does not limit the importance of their telco unit within their portfolio, saying that the unit’s “strategic importance” remains unchanged.
With fears of the second wave of coronavirus gradually increasing around the world, we should expect to see more financial conservatism from major companies around the world. It will be particularly interesting to see how this will impact the deployment and development of 5G.
SoftBank recently partnered with Ericsson to help build the Japanese telco’s standalone 5G core.
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