Japan’s SoftBank to raise US$41 billion to expand share buy-back, cut debt
- The share buy-back will be in addition to the up to 500 billion yen buy-back announced earlier this month
SoftBank Group Corp said on Monday it is selling or monetising up to 4.5 trillion yen (US$41 billion) in assets to buy back 2 trillion yen of its shares and reduce debt, sending its stock soaring to its biggest daily gain in nearly 12 years.
The share buy-back will be in addition to the up to 500 billion yen buy-back announced earlier this month, in the Japanese tech conglomerate’s biggest ever repurchase.
The buy-back tops the US$20 billion in purchases sought by activist hedge fund Elliott Management, which has put pressure on SoftBank to improve shareholder returns, and will see the company retire 45 per cent of its shares.
The asset sales come during a growing financial squeeze on SoftBank and its US$100 billion Vision Fund, which has recorded two consecutive quarters of losses as its tech bets fall short, with global economic growth sputtering due to the coronavirus pandemic.
SoftBank’s share price extended early gains on Monday, closing up almost 19 per cent following the announcement of the asset sales, which will be executed over the next four quarters.
SoftBank did not specify what would be sold.