Japanese telecommunications multinational corporation SoftBank has formally announced plans to offer an IPO on part of its telecoms business in an effort to offer some separation from its other domestic investment activities.
Reports circulating in Japan claim that the capital raised will be used in a bid to strengthen SoftBank’s balance sheet and for overall group growth. There has been other speculation that suggests the Japanese firm is aiming to raise around $18 billion.
In an official statement released by the SoftBank it declared that it is accelerating its global investment activities through SoftBank Vision Fund, and is actively looking for other avenues in which to drive overall growth within the organization.
In the statement, the Japanese telecommunications giant said that a number of companies were playing ‘critical roles in technology sectors’ including communications, internet, AI, smart robotics and Internet of Things, although it did stress it had its own strategies in place to expand their business.
By offering shares in Softbank with the IPO announcement, the firm expects that the respective roles and valuations of SoftBank Group, the parent company that is accelerating investments on a global scale, and SoftBank, a company core to the Group’s telecommunications business, will be clear, making it possible to communicate information regarding the Group’s businesses to the market with greater clarity and thereby better respond to the various needs of investors.
The announcement comes on the back of SoftBank disclosing its financials for the nine-month to 31 December 2017. Overall it was another very positive performance on the financial front for the Japan firm. It reported a net income increase of 20% which is attributable to shareholders and its revenue increased by 3.5% to JPY6.8 trillion.
Its operating income which excludes SoftBank Vision Fund and Delta Fund decreased by 1.8% to JPY912 billion. A representative for SoftBank claimed that growth in Sprint was offset by weakness in the domestic Japanese business.
However, there was a boost from the investment arms (which was not recorded in the prior year), including a revaluation of SoftBank Vision Fund’s investment in chip company Nvidia - and a decrease in telecom service revenue for the domestic unit, which also saw its profitability impacted by upfront investment in customer rewards and bundled tariffs.