SoftBank Group announced it will offload about 65 per cent of its stake in T-Mobile US for an estimated $21 billion to boost its cash holdings as it braces for additional impact from Covid-19 (coronavirus), which already hit many of its largest investments.
In a statement, the Japanese company said it plans to sell up to 198.3 million shares, with the funds raised to be used to repurchase common stock and the balance to go towards debt redemptions, bond buybacks and increasing cash reserves.
It noted concerns about a second and third wave of Covid-19 left the company believing “it needs to further enhance its cash reserves”.
The company holds a 25 per cent stake in T-Mobile following its merger with Sprint.
SoftBank previously outlined plans to sell JPY4.5 trillion ($42 billion) in assets to reduce debt and buy-back JPY2 trillion worth of shares, after reporting a record net loss of JPY961.6 billion in the year to end-March.
The company said until the T-Mobile funds are used for the planned share repurchase and debt reductions, it may invest them in “highly liquid securities and other instruments, together with other surplus funds”.
As part of its asset sale plan, in May it approved a sale of a 5 per cent stake of its domestic mobile operator valued at JPY310 billion.Subscribe to our daily newsletter Back