SoftBank offers mobile shares to secure massive loan - Mobile World Live

SoftBank offers mobile shares to secure massive loan

19 FEB 2020

SoftBank announced plans to borrow up to JPY500 billion ($4.5 billion) over two years from 16 domestic and overseas institutions, putting up a 20 per cent stake in its mobile subsidiary as collateral for the loan.

In a statement, SoftBank said it offered around a third of its 66 per cent stake (the equivalent of around 953 million shares) in its Japanese mobile subsidiary SoftBank Corp against the margin loan.

The shares pledged are worth around JPY1.4 trillion at today’s (19 February) market price, almost triple the amount of what it is borrowing.

Financial strain
While the loan has been positioned as a means to improve its cash position, the move comes after the Japanese conglomerate drew fire from Elliott Management earlier this month, as it emerged the US activist investor had amassed a 3 per cent stake in the company.

SoftBank also recently unveiled plans for a second Vision Fund, which could put a strain on finances as it plans to invest its own capital, due to reported struggles in attracting external investors.

Indeed, the first Vision Fund has not performed as well as the company hoped.

SoftBank recorded a large drop in operating profit at group level in its fiscal Q3, as the Vision Fund slipped to a loss.

Its mobile unit performed well, though, with revenue increases across all business units during the same period.



Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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