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Japanese operator to reduce stake to 28% in order to improve liquidity, cut debt.
Softbank on Wednesday announced plans to raise a minimum of US$7.9 billion (€7.08 billion) by selling a 4% stake in Chinese e-commerce giant Alibaba.
The Japanese operator said the move is in line with its strategy of improving liquidity and reducing debt.
Softbank said it will sell $2 billion of Alibaba shares to Alibaba, plus $400 million of shares to members of the Alibaba Partnership – a 34-member executive committee – and $500 million of shares to an unnamed sovereign wealth fund.
Meanwhile, a newly-formed trust will offer $5 billion worth of exchangeable trust securities in a private placement to institutional investors. These securities are exchangeable into American depository shares (ADSs) of Alibaba.
Furthermore, the institutional investors will have an option to purchase up to an additional $1 billion worth of exchangeable trust securities, which would increase the overall sum raised by Softbank to $8.9 billion.
Most of the transactions are expected to close on 10 June, reducing Softbank’s stake in Alibaba to 28% from 32%. The exception is the share sale to the Alibaba Partnership, which is expected to close in 45 days.
Softbank said it intends to maintain a strong relationship with Alibaba, with Softbank CEO Masayoshi Son continuing to sit on Alibaba’s board, and Alibaba chairman Jack Ma maintaining his position on Softbank’s board.
"When I first met Jack Ma, I knew immediately he had the vision and passion to build the world’s leading e-commerce company, and I was very happy to invest alongside him to help him realise his ambition." said Masayoshi Son, in a statement.
"This investment has been phenomenally successful and, over the past 16 years, we have built a close relationship, working together on many exciting projects. In that time, we have not sold any Alibaba shares. There are huge opportunities ahead for Alibaba and SBG (Softbank Group) looks forward to the continued partnership," he said.
