BEIJING (Alliance News) - Japanese mobile carrier SoftBank Group Corp said late Tuesday that it will sell at least USD7.9 billion of its shares in Chinese e-commerce giant Alibaba Group Holding Ltd in order to boost its liquidity and raise funds to reduce debt.
SoftBank, owner of telecom company Sprint Corp, said that the Alibaba stake sale will increase its liquidity cushion as well as enable flexible and prudent financial management.
SoftBank said it will issue USD5 billion in mandatory exchangeable trust securities convertible into American depositary shares of Alibaba, in a private placement to institutional buyers.
The company also intends to sell USD2 billion of Alibaba shares back to Alibaba, USD400 million in shares to the Alibaba Partnership, and USD500 million of shares to a major unidentified sovereign wealth fund.
The sale of Alibaba shares would be the first by SoftBank since it started to invest in Alibaba in 2000. SoftBank said it continues to be committed to its partnership with Alibaba, and the transactions are driven purely by its capital structure and de-leveraging objectives.
Following the share sale, SoftBank's stake in Alibaba will be reduced to about 28% from 32.2% in end March 2016. However, SoftBank will remain Alibaba's largest stockholder and close strategic partner following the stake sale.
SoftBank's Chairman & CEO Masayoshi Son will remain a board director of Alibaba, and Alibaba's Executive Chairman Jack Ma will remain a board director of SoftBank.
In connection with the stake sale, SoftBank said it will also enter into a lockup agreement with Alibaba under which it has agreed not to transfer any Alibaba shares held by it for a period of six months, subject to certain exceptions.
Copyright RTT News/dpa-AFX, source Alliance News