SoftBank is looking to sell its T-Mobile stake

After SoftBank experienced a ¥1.36 trillion loss during the last fiscal year.
Written by Campbell Kwan, Contributor
Image: T-Mobile

SoftBank Group has announced it is seeking to sell its shares in T-Mobile US, which it acquired via T-Mobile's merger with Sprint in April after years of on-and-off talks.  

SoftBank Group currently has around $30 billion worth of shares, or a 27.3% stake, of the post-merger T-Mobile.

In the announcement, the Japanese conglomerate said it has been exploring transaction options with other stockholders, such as Deutsche Telekom, which is currently the controlling stockholder and holds a 41.7% stake in the US telco.

Among what the company said is open for consideration are the sale of SoftBank Group's common stock, including private placements or public offerings; transactions with T-Mobile, stockholders of T-Mobile, or third parties; derivative or hedging transactions; margin loans; and other structured transactions.

"The exploration of any potential transactions will involve discussions and negotiations between or among T-Mobile and Deutsche Telekom AG, which SBG has had and continues to have," SoftBank Group said.

Last month, Bloomberg had reported SoftBank was looking to sell about $20 billion of its T-Mobile stake to investors, including Deutsche Telekom. 

While Masayoshi Son, SoftBank's CEO and chairman, told investors at the company's full-year earnings presentation in May that it was considering various financing options in regards to T-Mobile, its intention to sell its stake of the US telco was not confirmed until now.

The potential sale would be part of SoftBank Group's ¥4.5 trillion ($41 billion) debt reduction scheme that was announced in March. When the scheme was first announced, SoftBank said it would buy back up to ¥2 trillion worth of shares, in addition to a ¥500 billion share buyback it had announced earlier that month. SoftBank has since spent a further ¥500 billion to repurchase its own shares.

SoftBank Group's decision to try and shed its T-Mobile US stake follows the company revealing it suffered an operating loss of ¥1.36 trillion for the fiscal year ended March 31, which was its first annual loss in 15 years. The trillion dollar figure was largely attributed to SoftBank's Vision Fund experiencing a ¥1.93 trillion loss. Compared to the year prior, the fund posted a ¥1.26 trillion profit.

The Vision Fund's consumer investments, real estate investments, and transportation and logistics investments -- which include Uber, Didi Chuxing, and Grab -- were hit particularly hard. The fair value of these three segments fell by $3.3 billion, $3.3 billion, and $2.8 billion, respectively, in the three months to March alone. 

Beyond the losses, SoftBank is also facing a lawsuit from WeWork for its decision to back out of a $3 billion tender offer that was agreed upon in October last year.

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