Report claims SoftBank is leveraging IPO to secure financing for other businesses

A SoftBank mobile store
SoftBank is considering selling a one-third stake in the mobile business that would give the company a $90 billion listing value. (Source: Wiki Commons)

A report claims SoftBank Group CEO Masayoshi Son is asking potential underwriters for its upcoming SoftBank Mobile IPO to lend money to other businesses within the parent company.

Citing unnamed sources, Bloomberg reports the company is considering leveraging the possibility of participation in the wireless business IPO to draw loans from companies that would be put towards some of SoftBank Group’s other businesses, which is considered highly unusual.

In August, Son announced the company plans to list SoftBank Mobile on the Tokyo Stock Exchange, in what could be the biggest IPO listing in the world. SoftBank is considering selling a one-third stake in the mobile business that would give the company a $90 billion listing value. A $30 billion IPO listing would surpass Alibaba’s $25 billion IPO listing back in 2014—the largest IPO listing ever. Earlier reports indicated SoftBank could list its IPO as early as Q4 2018.

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SoftBank is hoping to use its stakes in outside companies like ARM Holdings as further collateral for bank loans totaling $8 billion. SoftBank is telling firms that if they provide financing they will have a better chance of participating in the IPO, according to Bloomberg’s report. Those types of deals are not unusual for IPOs. Companies listing on stock exchanges typically ask firms that have provided financing in the past to serve as underwriters for IPOs. But asking for financing that would be applied to other parts of the parent company is unusual.

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SoftBank spokesman Takeaki Nukii has denied the report, telling Bloomberg: “There is no truth to this.”

Bloomberg reports the financing firms are now deciding whether or not such financing would be possible, and if so, what type of risk assessments would need to be cleared first.

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