SoftBank Group Chairman and CEO Masayoshi Son holds an online press conference in Tokyo, Japan, May 12, 2022. /CFP
SoftBank Group Chairman and CEO Masayoshi Son holds an online press conference in Tokyo, Japan, May 12, 2022. /CFP
SoftBank Group on Wednesday said it will book an estimated gain of 4.6 trillion yen ($34.08 billion) on settling prepaid forward contracts using shares in Alibaba Group, reducing its stake to 14.6 percent from 23.7 percent.
The estimated gain includes a 2.4 trillion yen gain from the re-valuation of shares in the Chinese e-commerce giant and a derivative gain of 700 billion yen, SoftBank said in a filing.
The transaction "will be able to eliminate concerns about future cash outflows, and furthermore, reduce costs associated with these prepaid forward contracts," SoftBank said.
"These will further strengthen our defense against the severe market environment," SoftBank added.
The Japanese conglomerate on Monday booked a record quarterly net loss due to sliding valuations at the Vision Fund investment arm, with Chief Executive Masayoshi Son pledging to further rein in investment activity and cut costs.
The transaction is not expected to result in additional sales of Alibaba shares on the market as the shares were hedged at the time of the original monetization, SoftBank said.
SoftBank on Monday posted a 3.16 trillion yen net loss in the April-June quarter.
(Reuters with edits)