SoftBank Group confirmed plans to list part of its Japanese telecoms business in order to offer some separation from its other investment activities.
Reuters reported the cash raised will be used to strengthen the balance sheet and for group growth. Previous reports suggested the Japan-based company may look to raise up to $18 billion.
In a statement, the company said it is accelerating its global investment activities through SoftBank Vision Fund and in other ways, in order to drive overall growth of the group. It said a great number of group companies are “playing critical roles in technology sectors” including communications, internet, artificial intelligence, smart robotics and IoT, while following their own strategies to expand their businesses
By listing shares in SoftBank, the companies “expect that the respective roles and valuations of SoftBank Group, the parent company that is accelerating investments on a global scale, and SoftBank, a company core to the Group’s telecommunications business, will be clear, making it possible to communicate information regarding the Group’s businesses to the market with greater clarity and thereby better respond to the various needs of investors”.
There was the caveat: “a decision to not list SoftBank shares could be made following reviews and studies conducted during the preparation process”.
The announcement came as SoftBank Group reported its financials for the nine months to 31 December 2017. Net income attributable to shareholders increased 20 per cent year-on-year to JPY1 trillion ($9.3 billion), on revenue which increased 3.5 per cent to JPY6.8 trillion.
Operating income (excluding SoftBank Vision Fund and Delta Fund) decreased 1.8 per cent to JPY912 billion, as growth in Sprint was offset by weakness in the domestic Japanese business, Yahoo Japan, ARM and in the distribution business (including an impairment charge related to its Brightstar business).
But there was a boost from the investment arms (not recorded in the prior year), including a revaluation of SoftBank Vision Fund’s investment in chip company Nvidia.
There was a decrease in telecom service revenue for the domestic unit, which also saw its profitability impacted by upfront investment in customer rewards and bundled tariffs.