SoftBank surges after unveiling $41b plan to reduce debt

The SoftBank Group Corp. logo is displayed inside the lobby of a building which houses the company's headquarters in Tokyo, Japan, on Thursday, Nov. 29, 2018. Photographer: Kiyoshi Ota/Bloomberg

SoftBank Group Corp. unveiled a plan to raise as much as 4.5 trillion yen ($41 billion) to replenish its coffers and slash debt over the coming year, moving to address investors’ concerns about its exposure to money-losing businesses during the coronavirus pandemic. Its shares surged.

The Japanese investment giant said it’s authorized the sale or monetization over the next four quarters of its assets, which include major holdings in corporations from China’s Alibaba Group Holding Ltd. to sharing-economy stalwarts such as Uber Technologies Inc. Billionaire Masayoshi Son’s company also said it was establishing a new share buyback program of as much as 2 trillion yen, on top of a previously announced program to repurchase 500 billion yen of stock.

Shares in the company soared as much as 18.6%, its most intraday since November 2008. Son is struggling to reassure investors about the stability of his empire amid fallout from the coronavirus. Its impact has hammered SoftBank portfolio companies like Uber and WeWork. The rout spread to credit markets and sparked a surge in the cost of insuring debt against default, including that of SoftBank, whose credit-default swaps touched their highest level in about a decade.

Alibaba’s stock was down more than 5% in the afternoon in Hong Kong. SoftBank spokeswoman Hiroe Kotera declined to comment on whether it would sell shares in the Chinese e-commerce giant.

S&P Global Ratings has cut its outlook on SoftBank to negative, citing the broad market declines and the conglomerate’s plans for a share buyback. SoftBank has said its financial policy is to have enough liquidity on hand to cover two years of bond repayments and focus on its loan-to-value ratio, a metric for balancing net interest-bearing debt against the value of investments. SoftBank has also said it’s curbing new investments to match the current environment and acknowledged that fundraising costs are likely to rise.

The new stock repurchase program comes on top of a 500 billion yen plan announced just over a week ago, after activist shareholder Elliott Management Corp. called on the Japanese investment firm to boost returns.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.