SoftBank’s equity value back to pre-COVID levels, says CEO Son

FILE PHOTO: Japan's SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo, Japan, Nov. 5, 2018. REUTERS/Kim Kyung-Hoon/File Photo

SoftBank Group Corp Chief Executive Masayoshi Son mounted a defence of his investing decisions on Thursday, saying the value of the Japanese conglomerate’s holdings has recovered to pre-coronavirus outbreak levels.

“We have worried a lot of people who thought that SoftBank is finished or is ‘SoftPunku’,” Son told a shareholder meeting, using a play on the word “puncture” used colloquially in Japanese when something is broken.

The rise in corporate value was driven by the growth of SoftBank’s stake in Chinese e-commerce giant Alibaba Group Holding Ltd and following the merger of its U.S. wireless unit Sprint with T-Mobile US Inc.

Sprint, which Son loaded up with debt and made repeated attempts to merge with T-Mobile before successfully closing the deal in April, has delivered an internal rate of return of 25%, Son said.

SoftBank has undertaken a complex transaction to divest part of its T-Mobile stake to raise $20 billion. That brings the total from an asset sale programme, which includes monetisation of stakes in Alibaba and wireless carrier SoftBank Corp, to $35 billion or 80% of the planned total, Son said.

Those funds are being allocated to share buybacks and to increase SoftBank’s financial leeway after the group was hit with a record annual loss in the year ended March as Son’s tech investments faltered.

The record 2.5 trillion yen ($23 billion) share buyback programme is a means of increasing value for shareholders, who should temper expectations around dividends, Son said.

Son said he has reduced his compensation following the poor financial performance but defended the high pay for executives such as Rajeev Misra, head of SoftBank’s $100 billion Vision Fund which recorded a 1.9 trillion yen operating loss.

Other Japanese corporates should overhaul compensation schemes to reward risk-taking, Son said.

“What are you scared of?” he said during a presentation.

The shareholder meeting saw the appointment of new board directors including entrepreneur Lip-Bu Tan, who was elected against the opposition of proxy adviser Glass Lewis.

Son also said he is stepping down from the board of Alibaba, following Alibaba co-founder Jack Ma’s departure from SoftBank’s board.

Reuters

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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.