Japanese conglomerate SoftBank Group Corp, the largest investor in Alibaba Group, has raised total proceeds worth US$10 billion after increasing the amount of shares it has sold in the Chinese e-commerce giant.
That figure is up from the US$8.9 billion announced on Thursday by SoftBank, which made its first sale of Alibaba stock since its initial investment in the Hangzhou-based company in 2000.
“We believe that the proceeds from the sale of [SoftBank’s] Alibaba stake, as well as from all other ... divestments will be used to potentially boost [the company’s share] buybacks,” Jefferies equity analyst Atul Goyal said in a research note.
In a statement, SoftBank said the qualified institutional buyers of its newly formed Mandatory Exchangeable Trust “exercised in full their option to purchase up to an additional 20 per cent, or US$1.1 billion of the securities”, which are exchangeable into Alibaba shares in three years.
That followed the aggregate private placement of US$5.5 billion in trust securities sold by SoftBank to these unnamed buyers on Thursday.
The total purchased 66 million exchangeable securities outstanding, which will pay quarterly distributions of US$1.4375 per trust security, allows SoftBank “to retain upside exposure to Alibaba while monetising a portion of its holdings” in the world’s largest e-commerce services company, the Japanese firm said.