SoftBank Group Corp. plans to sell about $14 billion in shares of Chinese e-commerce giant Alibaba Group Holding Ltd. as part of an effort to raise $41 billion to shore up its businesses battered by the pandemic, according to people with knowledge of the matter.
The Japanese conglomerate is considering raising the remainder of the money by selling a stake in SoftBank Corp., its domestic telecommunications arm, as well as part of its stake in Sprint Corp. following its merger with T-Mobile US Inc., said one of the people, who requested anonymity discussing private transactions.
The Alibaba stake sale could range from as little as $12 billion to as much as $15 billion, the people said. Alibaba’s American depositary receipts fell as much as 2% in after-hours trading after Bloomberg’s story published on Monday.
Masayoshi Son, the founder of SoftBank, announced the sale plans Monday in Tokyo, though he didn’t specify which assets would be sold. He’s eager to generate funds to buy back shares and slash debt to alleviate investor concerns that have shaved more than 40% off SoftBank’s market value since its February peak. The company, which also operates the $100 billion Vision Fund, is vulnerable to economic shocks given its enormous debt load and ties to unprofitable startups. Many of the Vision Fund’s biggest bets lie in what’s known as the sharing economy, which has been particularly hard-hit by a virus that’s causing millions of people to stay indoors and slash travel spending. SoftBank stock surged 19% in Tokyo after Son’s announcement.
The Alibaba stake, worth more than $120 billion, makes up the largest chunk of SoftBank’s unrealized value. An Alibaba spokesperson didn’t respond to an emailed request for comment. SoftBank spokespeople in Tokyo and the U.S. declined to comment.
Part of the SoftBank asset-sale proceeds would go toward a new share buyback program of as much as 2 trillion yen ($18 billion) that comes on top of previously announced repurchases.