Japan’s Softbank to sell its stock in US network operator T-Mobile
Tokyo, June 23 (efe-epa).- Japan’s Softbank announced on Tuesday that it would dispose of nearly all the shares it owns in United States-based mobile network operator T-Mobile in sales and purchases options.
The sale forms a part of a Softbank program to raise 4.5 trillion yen ($42.1 billion) to repurchase its shares and reduce debt, which has shot up due to a series of unprofitable investments.
The Japanese telecom giant said in a statement that it was set to sell off 198.3 million shares of T-Mobile, representing around 65 percent of its stake, and will establish a call option for another 101.4 million shares, with the price yet to be decided.
If the transactions are completed in their entirety, Softbank plans to retain around 4.8 million T-Bank shares, amounting to around 0.4 percent of the total shares, a major drop compared to the 24 percent stake it owns currently.
“Given the current situation where there is a concern for a second and third wave of the spread of COVID-19, SBG (SoftBank Group Corp.) believes that it needs to further enhance its cash reserves,” the group said in the statement.
The Japanese conglomerate had devised a strategy to dispose of some of its investments after registering its worst losses during the financial year 2019-20 – amounting to around $12.7 billion – mainly due to the bad performance of its venture capital fund.
The Vision Fund – the world’s largest venture capital fund for financing technological projects – was launched in 2016 and managed to attract $100 billion in its first edition.
However, last year it suffered setbacks in one of its most troubled investments, the United States-based office-space sharing startup WeWork, which has been witnessing a crisis that has affected Softbank and its profits.
Softbank had stopped the acquisition of T-Mobile shares at the beginning of this year after US regulators approved the merger of the wireless operator with its rival Sprint, which is controlled by the Japanese group and became a subsidiary of T-Mobile. EFE-EPA
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