Japan’s biggest telecoms operator, Softbank, has announced that it will sell off up to ¥4.5 trillion ($41 billion) of assets in an attempt to buy back shares and reduce the company’s sizable debt pile.
Under the scheme, ¥2 trillion ($18 billion) of the capital raised through asset sales would be used to buy back Softbank Group common stock, with the remainder being used to reduce company debt.
“This programme will be the largest share buyback and will increase in the largest increase in cash balance in the history of SBG, reflecting the firm and unwavering confidence we have in our business,” said Masayoshi Son, chairman and chief executive officer of SBG.
“This will allow us to strengthen our balance sheet while significantly reducing debt. Moreover, the monetisation of assets represents less than 20 per cent of the company’s current asset value,” he added.
Combined with its recently announced ¥500 billion ($4.5 billion) share buyback initiative announced earlier this year, Softbank claims that it will have repurchased around 45 per cent of its own stock from private ownership.
Softbank has been undergoing a process of monetising its assets in recent months, with the merger of its US telecoms brand Sprint with its competitor T-Mobile adding significant cash injections to Softbank Group’s revenues.
Softbank Group has not yet confirmed which of its remaining assets it intends to sell off.