TOKYO: SoftBank Group said Monday it would sell up to $41 billion in assets to finance a stock buyback, reduce debts and increase its cash reserves.
In a statement, it said it would buy back $18 billion of its stock, with the remaining money to be used on debt, bond buybacks and cash reserves, setting a four-quarter timetable for the transactions.
News of the massive buyback sent SoftBank stock limit-up, soaring more than 18 percent in the last hour of trade in Tokyo.
“This program will be the largest share buyback and will result in the largest increase in cash balance in the history of SBG, reflecting the firm and unwavering confidence we have in our business,” the firm’s chairman Masayoshi Son said in a statement.
“This will allow us to strengthen our balance sheet while significantly reducing debt,” he added, saying the assets being sold account for “less than 20 percent of the Company’s current asset value.”
The statement said the firm believes its shares are currently “substantially undervalued” and that the buyback would see 45 percent of the firm’s stock repurchased and retired.
It said the massive program would “further strengthen its balance sheet and enhance its credit rating.”
SoftBank has seen its stock sink in recent weeks on worries about the liquidity of the heavily indebted company, as global financial markets are roiled by fears about the economic consequences of the pandemic.
It had already announced a massive share buyback that prompted S&P Global Ratings to cut the firm’s outlook to negative, a move some analysts said misinterpreted the company’s health.
Some said Monday’s move should also be viewed positively.
“It’s not a bad strategy to use their cash for buying back shares when the outlook of the market and the economy is very uncertain,” Yoshihiro Okumura, general manager at Chibagin Asset Management, told AFP.
“The market took the surprise announcement positively at a time when it’s hard to find good investment destinations.”
SoftBank to sell up to $41 bn in assets to buy shares, reduce debt
https://arab.news/gkrnv
SoftBank to sell up to $41 bn in assets to buy shares, reduce debt
- News of the massive buyback sent SoftBank stock limit-up
- It would buy back $18 billion of its stock, with the remaining money to be used on debt, bond buybacks and cash reserves
Closing Bell: Saudi main index closes in red at 10,847
RIYADH: Saudi Arabia’s Tadawul All Share Index dipped on Wednesday, losing 58.51 points, or 0.54 percent, to close at 10,847.93.
The total trading turnover of the benchmark index was SR3.78 billion ($1 billion), as 73 of the listed stocks advanced, while 187 retreated.
The MSCI Tadawul Index decreased, down 7.09 points or 0.48 percent, to close at 1,472.98.
The Kingdom’s parallel market Nomu lost 178.75 points, or 0.77 percent, to close at 22,916.83. This comes as 30 of the listed stocks advanced, while 37 retreated.
The best-performing stock was the Power and Water Utility Co. for Jubail and Yanbu, with its share price surging by 8.47 percent to SR31.24.
Other top performers included Saudi Paper Manufacturing Co., which saw its share price rise by 6.13 percent to SR53.70, and Jamjoom Pharmaceuticals Factory Co., which saw a 4.58 percent increase to SR137.
On the downside, the worst performer of the day was CHUBB Arabia Cooperative Insurance Co., whose share price fell by 5.14 percent to SR17.53.
Saudi Kayan Petrochemical Co. and Arabian Internet and Communications Services Co. also saw declines, with their shares dropping by 4.87 percent and 4.43 percent to SR4.88 and SR181.40, respectively.
On the announcement front, Saudi Kayan Petrochemical Co. announced its annual financial results for 2025, with sales dropping 3.06 percent year-on-year to SR8.45 billion. The company also recorded a net loss of SR893.86 million.
In a Tadawul statement, the company said the net loss and decline in annual sales were driven by a drop in average selling prices, despite higher sales volumes.
