SoftBank Group estimates it will put a record $13 billion full-year loss, dragged down by its $100 billion Vision Fund, has renewed focus on a deliberate asset sell-down geared toward raising money and restoring confidence.
SoftBank shares dropped up to 4% on Tuesday before recovering to settle up 5% after the group late Monday stated it sees a 1.8 trillion yen ($16.7 billion) full-year loss at the Imaginative and prescient Fund as its tech bets tumble.
The disastrous role at the fund on which CEO Masayoshi Son has staked his reputation will drag the entire group to its biggest annual loss, marking the need for his program to raise up to 4.5 trillion yen through asset sales.
While home carrier SoftBank is seen as a possible target, SoftBank relies on its dividends for cash flow, leaving its holding in Alibaba Group Holding the most likely to be sold down or monetized, UBS analyst Kei Takahashi mentioned in a client note.
SoftBank’s greatest asset, its 26% stake in the Chinese e-commerce chief, has already been used as collateral to borrow over a trillion yen, with collar deals contributing an additional 200 billion by December-end.
The Alibaba stake could be utilized to raise 3 trillion yen, Takahashi wrote, along with utilizing its stake in wireless carrier T-Mobile, which recently completed a merger with SoftBank’s Sprint, as collateral for loans.