Tokyo, Japan—SoftBank Group said Friday it will sell shares of its Japan telecoms unit SoftBank Group Corp worth approximately $12.5 billion as it pushes to boost its cash reserves.
The sale, which was announced after Friday’s trading close, is expected to take place in late September and involves more than 927 million shares in the Japanese telecoms unit. SoftBank Group Corp ended Friday’s session at 1,431.5 yen.
The stock sale comes as part of a massive fundraising program by SoftBank Group that was initially expected to raise 4.5 trillion yen ($41 billion), and also intended to reduce the firm’s debts and increase cash reserves.
In a statement, SoftBank Group cited “the ongoing uncertainty in the market environment due to concerns about a potential second or even third wave of COVID-19.”
In light of those fears it said it was “necessary to expand cash reserves beyond the JPY 4.5 Trillion Program to ensure flexible options to respond to changes in the market environment.”
It said the offering did not change its relationship with SoftBank Group Corp and that the firm’s “strategic importance to the entire SoftBank Group remains unchanged.”
The sale will reduce SoftBank Group’s stake in the telecoms firm from 62.1 percent to 40.4 percent, according to the statement.
The stock offering will be divided between Japanese and international offerings, it added.
Earlier this month SoftBank Group reported a $12-billion quarterly net profit to June, an 11.9-percent rise that put it back in the black after a turbulent financial year.
The results were regarded as a boost for founder and for chief Masayoshi Son, who faced an drumbeat of criticism after recent record losses for the firm.
Son transformed what began as a telecoms company into an investment and tech behemoth with stakes in some of Silicon Valley’s hottest start-ups through its $100-billion Vision Fund.
But he has battled opposition to his strategy of pouring money into start-ups—including troubled office-sharing firm WeWork—which some analysts say are overvalued and lack clear profit models.
Son has insisted that his strategy is sound, and that SoftBank’s portfolio is broad enough to weather the storm, but acknowledged the challenges when the firm reported an eye-watering $8.9-billion annual net loss in May, hit by the WeWork debacle and stock crashes.
