​SoftBank Group to raise 73b yen from GungHo share sales

SoftBank Group has announced it will be selling off 248.3 million common shares it currently owns in gaming firm GungHo Online Entertainment as part of its '2.0 transformation strategy'.
Written by Aimee Chanthadavong, Contributor

Japanese telco giant SoftBank Group Corp (SBG) is expected to raise approximately 73 billion yen (AU$921 million) from selling off a total of 248.3 million of GungHo Online Entertainment common shares.

The shares are currently held by SGB and its subsidiary SoftBank Corp.

SoftBank Group said it entered into an agreement with the gaming firm to sell each share for 309 yen with an applied 4.85 percent discount.

The company added that the move forms part of SoftBank's "2.0 transformation strategy".

"SBG sounded out GungHo about the sale of common shares of GungHo held by SBG and SB to monetize the shares. In response GungHo indicated its intention of the Tender Offer, and accordingly SBG and GungHo entered into the agreement," the company said.

The move by SoftBank to scale back its stake in GungHo follows the company having announced it will be selling its $7.9 billion interest in Chinese ecommerce giant Alibaba to pay off debts. The telco giant's stake would be reduced from 32 percent to 28 percent following the sale.

So far, the sale has attracted interest from Singapore's state-owned investment firms, Temasek Holdings and GIC, which have each committed to dishing out $500 million to purchase the shares.

But the sale will not put an end to the long-term relationship between SoftBank and Alibaba. The pair announced a joint venture last month to launch a cloud company called SB Cloud in Japan. It will bring together Alibaba Cloud's technology to Japanese businesses.

SoftBank has been looking for ways to strengthen its balance sheet since 2012. Since then its net debt has near quadrupled, with part of it due to the difficulty faced by Sprint, which it bought back in 2013.

In March, SoftBank announced plans to split its organisation into two, with one part to focus on its Japanese operation and the other on its international business.

At the time, the company said its proposal will be conducted after it gains shareholder approval, but the timing and method of the transfer will be left up to SoftBank chairman and CEO Masayoshi Son. The completion of the transfer is currently slated for the end of the year.

Prior to that, the company revealed plans to launch a stock buyback program worth up to $4.4 billion in order to increase its share price.

SoftBank said the latest share repurchase will take place over the course of a year, and will be funded through cash reserves and the sale of items in the company portfolio.

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