SoftBank Group of Japan Officially Considers Selling T-Mobile Shares to Improve Financials

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Japanese SoftBank Group has announced that it is considering selling its shares in the U.S. telecommunications company T-Mobile, NHK and other media reported on the 16th. This move aims to improve finances amid significantly worsened performance due to investment losses and the impact of the novel coronavirus disease (COVID-19).

According to reports, SoftBank Group stated that it began reviewing the monetization of T-Mobile shares on the same day. This is part of a 4.5 trillion yen asset sale plan announced in March for share buybacks and debt reduction, but the scale of the share sale has not yet been finalized. This is the first time SoftBank Group has announced that it is pursuing transactions including the sale of T-Mobile shares.

Previously, SoftBank announced asset sales worth 1.5 trillion yen through the sale of shares in China’s Alibaba Group and its telecommunications subsidiary SoftBank, but it is reported that preparations for selling the remaining 3 trillion yen have been underway behind the scenes. Besides share sales, various options such as financial derivative transactions and stock-collateralized loans are also being considered.

T-Mobile merged with Sprint, a consolidated subsidiary of SoftBank Group, in April. As a result, T-Mobile became an equity-method affiliate of SoftBank Group. SoftBank Group holds 24% of T-Mobile shares. Although there is a clause restricting SoftBank Group’s share sales after the merger of T-Mobile and Sprint, it is expected that this can be lifted through consultations with Deutsche Telekom, the largest shareholder of T-Mobile.

As of April 1, SoftBank Group recorded the consolidated book value per share of T-Mobile at $82.99. However, the market price of T-Mobile shares closed at $104.68 on the 15th, far exceeding the book value. Therefore, if SoftBank sells its T-Mobile holdings, it is expected to realize gains accordingly. However, SoftBank Group stated that depending on the results of the sale review, the transaction may not proceed.

This content was produced with the assistance of AI translation services.