SoftBank Group has won approval to conduct a 2.4 trillion yen or $21.04 billion initial public offering (IPO) of its domestic telecoms business, Reuters reported.
The IPO will be one of the biggest ever worldwide, and will provide the group with funds to pay down debt and continue placing big bets on innovations that Chief Executive Masayoshi Son predicts will drive future tech trends.
SoftBank Group aims to raise 2.4 trillion yen through the sale of 1.6 billion SoftBank Corp shares at a tentative price of 1,500 yen each, showed a filing with the Ministry of Finance on Monday.
The amount could increase by 240.6 billion yen if demand triggers an overallotment, taking the total closer to the $25 billion that Alibaba raised in 2014 in the biggest-ever IPO.
The final IPO price will be determined on Dec. 10, and SoftBank Corp will list on the Tokyo Stock Exchange on Dec. 19 with an initial market value of 7.18 trillion yen – about 1 trillion yen above that of rival KDDI, which has about 10 million more subscribers.
The parent will retain a stake of around two-thirds, depending on the overallotment.
Son in June argued that even without the domestic telecoms business, SoftBank Group shares should be worth over 14,000 yen – almost 40 percent over their current price – considering the value of its investments in Alibaba, Arm Holdings, Sprint and Yahoo Japan, as well as Vision Fund.
U.S. credit-rating firm S&P Global Ratings said the IPO was credit positive for the parent, saying it expects a bulk of the proceeds to be used to repay debt. The group’s interest-bearing debt was nearly 18 trillion yen at end-September.
Nomura, Mizuho, Deutsche Bank, Goldman Sachs, JP Morgan and SMBC Nikko are joint global coordinators for the IPO.