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Reuters

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's US$150 billion Alibaba war chest in spotlight
SoftBank did not specify what would be sold.
SoftBank’s share price has been hammered by investor scepticism over the outlook for CEO Masayoshi Son’s bets on start-ups like WeWork and Uber.
Its plans to fund the initial 500 billion yen buy-back with debt was received negatively by analysts and investors who were concerned by Son’s willingness to leverage the company.
Beyond the share buy-back, proceeds will be used for repaying debt, buying back bonds and boosting cash reserves, reflecting Son’s “firm and unwavering confidence” in the business, it said in a statement.
Given fragile markets SoftBank may look to monetise its stakes in the merged Sprint and T-Mobile US or Chinese e-commerce giant Alibaba Group, Redex Holdings analyst Kirk Boodry said.
Son previously offloaded part of the stake in Alibaba, of which SoftBank currently owns 25 per cent, in a complicated transaction ahead of the 2016 purchase of chip designer Arm.
Alibaba is the parent company of the South China Morning Post.
The asset sales come as SoftBank’s conglomerate discount, or the difference between its market capitalisation and the value of its assets, last week yawned to a record 73 per cent.
“That’s a wakeup call that investors are really worried,” Boodry said, overriding Son’s previous reticence to sell down his portfolio.
High on the list of pressing problems is a fight brewing over a major soured bet, co-working start-up WeWork, as SoftBank eyes pulling out of a US$3 billion bid to buy additional shares.

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The share buy-back will be in addition to the up to 500 billion yen buy-back announced earlier this month



Japan’s SoftBank said it plans to sell up to US$41 billion in assets to buy back its shares and reduce debt amid a growing financial squeeze on the company
