SoftBank plans US$5.5 bil buyback with telecom IPO proceeds

Softbank CEO Masayoshi Son is turning the company into a technology investment firm.

TOKYO: SoftBank Group Corp said it would buy back as much as 600 billion yen (US$5.5 billion) of its shares, following the blockbuster initial public offering of its telecommunications business.

The total represents a massive 10% of issued shares with the goal of improving finances and shareholder returns, the company said in a statement Wednesday. SoftBank raised 2.4 trillion yen from the listing of the domestic telecom operations in December. Shares rose in late trading.

Masayoshi Son has been remaking SoftBank Group from primarily a telecoms operator into a technology investment firm. With the listing of domestic telco operations in December and the pending sale of Sprint Corp in the US, the billionaire can focus on the US$100 billion Vision Fund. The portfolio already includes the world’s biggest ride-hailing companies including Uber Technologies Inc, co-working giant WeWork Cos and leading chipmaker Arm Holdings Plc. Thanks to valuation gains, profit in the Vision Fund and SoftBank’s own Delta Fund more than tripled to 176 billion yen.

The Vision Fund sold all of its shares in US graphics chip maker Nvidia Corp in January, worth 398 billion yen. News of the share sale first emerged in December, when people with knowledge of the matter said it was likely. For the three quarters preceding the sale, SoftBank booked a net loss of 50 billion yen on the stake.

SoftBank Group shares jumped as much as 7% in after-hours trading on SBI Japannext Co’s platform. Volume was low, with just 12,000 shares trading hands, worth less than US$1 million.

The repurchase period will start Thursday and last through the end of January next year. SoftBank Group’s operating income rose 60% to 438 billion yen in the last three months of 2018. Revenue rose about 5%. The company didn’t give full-year earnings forecasts.

Telecom unit SoftBank Corp yesterday reported a 24% increase in profit during the quarter, despite a mobile service outage that hit millions of customers before its initial public offering in December. The company kept its outlook for net income to climb 4.8% to 420 billion yen in the fiscal year ending in March.