Newspaper article International New York Times

SoftBank Selling Part of Its Stake in Alibaba ; Company Seeks to Raise $8 Billion under Plan to Reduce Debt and Cut Costs

Newspaper article International New York Times

SoftBank Selling Part of Its Stake in Alibaba ; Company Seeks to Raise $8 Billion under Plan to Reduce Debt and Cut Costs

Article excerpt

The Japanese telecom said it would sell $8 billion worth of shares to help pay down debt.

When the Alibaba Group was barely a year old in 2000, the fledgling Chinese e-commerce company gained an early believer and investor in Masayoshi Son, the outspoken Japanese telecommunications mogul.

Sixteen years later, Mr. Son and his telecommunications company, SoftBank, are finally selling a portion of that stake after its value has mushroomed to billions of dollars.

SoftBank said on Tuesday that it planned to sell approximately $8 billion of its shares in Alibaba. The reason: The Japanese company is seeking to pay down some of its hefty debt load.

SoftBank said it would remain one of Alibaba's biggest shareholders, with a stake of about 28 percent after the share sale.

The move comes as SoftBank, a Japanese telecom concern, tries to cut costs and focus on turning around Sprint, the American cellphone service provider it controls. Though the rest of SoftBank, including its expansive Japanese wireless network and the Yahoo Japan business that it runs, is performing well, Sprint remains far behind its United States counterparts in customers and sales.

That has prompted SoftBank, under its president, Nikesh Arora, to focus on cutting costs and shedding debt in its "SoftBank 2.0" strategy. The company reported holding about 8.5 trillion yen, or roughly $77 billion, worth of long-term debt as of March 31, according to Standard & Poor's Capital IQ, a research service.

Alibaba has become one of the most valuable assets in SoftBank's portfolio of businesses. The Chinese e-commerce giant made its debut as a public company on the New York Stock Exchange in 2014 and now holds a market value of about $209 billion.

The share sale, which has been in the works for months, has not been driven by concern over Alibaba's financial prospects, according to people with direct knowledge of the matter, who were not authorized to speak publicly. …

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