SoftBank Group Plans Domestic Mobile Phone Unit IPO

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Telecom company SoftBank Group Corp. revealed on Wednesday its plans to list its Japanese mobile phone carrier division, as the conglomerate seeks to boost its investment power.

SoftBank founder and chief executive Masayoshi Son stated that they are preparing to sell shares of the company’s core unit SoftBank Corp. The money will then be used to bolster financial balance and help support further growth of the group.

Shares of SoftBank were up by 3.8 percent to ¥8,688 on Wednesday.

Japan’s third-largest mobile phone business is expected to go public this year. The proceeds from the initial public offering (IPO) are meant for strengthening Japanese technology and the multinational corporation’s investment clout.

Softbank already said last month that it was considering listing the unit. Analysts at that time estimated the listing would raise about ¥2 trillion ($18 billion). This was probably the largest IPO by a Japanese company in almost two decades.

Son did not specify how much the Tokyo listing would potentially raise. However, analysts had estimated the unit’s overall value could be within the range of ¥6 trillion to ¥6.6 trillion ($55 billion to $60 billion).

Whether the funds would be mainly intended for investments, or growing balance its sheet was not clarified as well.

SoftBank Corp. makes up about a third of group sales, but two-thirds of income. The parent has long depended on it as a steady source of cash that can be reallocated to its increasing number of investments around the globe.    

SoftBank Stepping Up Investments

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SoftBank has been on a huge buying spree involving its $93 billion Saudi-backed SoftBank Vision Fund. It included its $7.7 billion deal to acquire a 15 percent stake in ride-hailing firm Uber Technologies Inc.

The telecom group has also bought stakes from Uber’s Chinese counterpart Didi Chuxing and India’s e-commerce company Flipkart.

Backing its growing bubble of acquisitions were its Japanese telecom operations and online retail giant Alibaba Group Holding Ltd.

However, having a saturated market at home and refusing to give up more Alibaba shares, Son has been seeking other sources of capital.

SoftBank’s market capitalization has fallen behind the value of its assets. Separating its mobile phone unit might help lessen the gap. It may also bolster capital and ease some of its debt load.

Son stated that through the IPO, various parts of the company can continue to grow independently. He added that this way he can also have more time to focus on longer-term global corporate strategy.

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