Date
22 April 2019
SoftBank, which controls the world’s biggest tech private equity fund at nearly US$100 billion, will use the IPO proceeds to invest in startups. Photo: Bloomberg
SoftBank, which controls the world’s biggest tech private equity fund at nearly US$100 billion, will use the IPO proceeds to invest in startups. Photo: Bloomberg

SoftBank’s record IPO reaches US$23.5 billion

SoftBank Group Corp. is set to raise 2.65 trillion yen (US$23.5 billion) in Japan’s biggest-ever initial public offering, Reuters reports.

Telco unit SoftBank Corp. priced its stock at 1,500 yen apiece, as previously indicated.

It also said it will sell all extra shares set aside for excess demand, taking the total just shy of the record US$25 billion raised in 2014 by Chinese e-commerce giant Alibaba Group Holding Ltd., a SoftBank Group portfolio company.

The group, which controls the world’s biggest tech private equity fund at nearly US$100 billion, will use the proceeds to invest in startups which have ranged from tiny games makers to US ride-hailing giant Uber Technologies Inc. 

“Demand was well above the number of shares on offer,” SoftBank Corp. said on Monday, declining to disclose by how much.

The stock will debut on the Tokyo Stock Exchange’s first section on Dec. 19.

Troubled backdrop

The IPO pricing comes just days after Japan’s third-largest mobile phone network provider by subscriber numbers suffered a rare nationwide service outage. SoftBank said the disruption would not affect its earnings or dividend forecast.

But other causes of concern abound. The government wants to see a decline in mobile phone charges just as competition is set to increase with the market entrance next year of e-commerce firm Rakuten Inc.

Moreover, Tokyo plans to ban government purchases of telecommunications equipment from Chinese maker Huawei Technologies Co. Ltd., sources have told Reuters.

SoftBank has a long relationship with Huawei that has included joint trials of fifth-generation (5G) network technology.

On Monday, Kyodo News reported that SoftBank will no longer use Huawei equipment for its current network as well as in 5G. The firm told Reuters it was closely watching government policy. 

Earlier in the IPO process, SoftBank Group’s ties to Saudi Arabia, whose contribution makes up almost half of its massive Vision fund, caused investors to sweat after Saudi security forces were implicated in the murder of dissident journalist Jamal Khashoggi.

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CG

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