Japan's SoftBank to Sell Assets Worth 52 Trillion Won for Share Buybacks and Debt Reduction

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Japan's SoftBank Group announced on the 23rd that it will sell assets worth 4.5 trillion yen (approximately 52 trillion won) following a recent sharp decline in its stock price. Concerns over the performance of startups invested in by SoftBank Group amid the COVID-19 pandemic have spread, causing the group's stock price to plummet by more than 50% in the past month.

According to the Nihon Keizai Shimbun, SoftBank Group stated on the same day that it will sell assets to repurchase its own shares and reduce debt. Listed stocks of investment targets such as China's Alibaba Group and SoftBank are expected to be the main targets, and the funds raised will be used to invest up to 2 trillion yen in share buybacks, with the remainder allocated to debt reduction, the Nihon Keizai explained. The asset sales will be conducted over the next four quarters.

The reason SoftBank Group made this announcement is due to the sharp decline in its stock price following the recent spread of COVID-19. SoftBank Group's stock price traded at 5,751 yen on the Tokyo Stock Exchange on the 12th of last month but halved to 2,687 yen on the 19th. After announcing the asset sale plan on this day, the stock closed at 3,187 yen, up 19.23% from the previous trading day. Earlier, SoftBank Group had announced on the 13th that it would repurchase up to 500 billion yen worth of its own shares.

Masayoshi Son, Chairman and CEO of SoftBank Group, explained, "This is the largest share buyback in history and will also lead to the largest increase in cash deposits ever," adding, "It is based on firm confidence in our business."

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