SoftBank Group has announced it will sell around two-thirds of its T-Mobile shares and also give the telco's parent company, Deutsche Telekom AG, options to buy most of its remaining stake as part of ongoing efforts to reduce debt.
The first deal will see SoftBank Group sell over 198 million of its T-Mobile shares to T-Mobile itself.
Once those shares are sold, T-Mobile will then sell them via public and private offerings, to T-Mobile shareholders and to Marcelo Claure, a SoftBank director.
As part of that deal, SoftBank Group will also pay T-Mobile $300 million, in addition to any fees and expenses paid by T-Mobile in relation to the transaction.
In a separate deal, SoftBank Group will give Deutsche Telekom options to buy over 100 million T-Mobile shares, which accounts for most of the Japanese conglomerate's remaining stake in the US telco. The options will be available until 22 June 2024.
SoftBank added it would lose its right to nominate four of T-Mobile's 14 directors, with that number to be reduced to either one or zero, depending on its ownership in T-Mobile following the transactions.
SoftBank's decision to part with its T-Mobile shares is part of its ¥4.5 trillion ($41 billion) debt reduction scheme, announced in March, which was set up to increase its cash reserves in the face of negative performance by several of its key investments.
Prior to the sale, SoftBank Group had revealed 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.
As part of the debt reduction scheme, SoftBank will use any accrued funds, which includes the proceeds from the sale of its stake in T-Mobile US, to buy back up to ¥2 trillion worth of shares. This is in addition to two separate ¥500 billion share buybacks that were announced in March and May, respectively.
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.