SoftBank Group Corp. lifted the amount of money it will raise from selling down its stake in Alibaba Group Holding Ltd. to $10 billion, after exercising an option to sell more shares through a trust.
That compares with a previous figure of $8.9 billion, which was itself raised by $1 billion from an initial announcement earlier this week. SoftBank is seeking an infusion of cash in order to strengthen its balance sheet and give it more flexibility in making strategic investments.
An option to buy up to an additional 20 percent, or $1.1 billion, of trust securities exchangeable for Alibaba shares has been exercised in full, the Japanese company said in a statement Friday. That brings the total raised via the sale of those trust securities to $6.6 billion.
Alibaba is also paying $74 a share to buy back $2 billion of its own stock from SoftBank, which will also sell stakes worth $500 million apiece to two state-owned investment firms in Singapore at the same per-share price, Alibaba and SoftBank said. Another $400 million of shares will go to the Alibaba Partnership of senior executives.
SoftBank is selling Alibaba shares for the first time since making an initial investment in 2000, as the Japanese technology company looks for new investments in promising startups and strengthens its balance sheet, which includes a debt load of 11.9 trillion yen. President Nikesh Arora is leading the effort to re-examine the companys portfolio that will probably include further asset sales, a person familiar with the matter has said.
Founder Masayoshi Son has split SoftBank into domestic and overseas units, entrusting Arora with operations abroad and the search for the next Alibaba. Son started his investment in Alibaba with $20 million in 2000 and now owns 32 percent of the Chinese company, although that will decline following the share sale.
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