SoftBank is Planning to Sell Up to $21B of T-Mobile Stock

In an announcement on Monday, telecom giant SoftBank announced that it is planning to sell up to 198 million shares of T-Mobile stock. This equates to about $21 billion and represents roughly 65% of the company’s stake in T-Mobile.

The move is a part of SoftBank’s goal of freeing up cash due to the coronavirus pandemic impacting many of its key investments.

Ahead of the Covid-19 pandemic, SoftBank had also suffered when WeWork, a portfolio company of its $100 billion Vision Fund, failed to go public. SoftBank said in May that its Vision Fund had posted losses of $18 billion.

In March the company had announced that it would sell or monetize up to the equivalent of $41 billion in assets to buyback shares and reduce debt.

In its own press release, T-Mobile said that it would offer roughly 134 million of the shares SoftBank sells in the transaction to the public. It will give underwriters of the public equity offering the option to purchase an additional 10 million shares.

Marcelo Claure, a T-Mobile director and the CEO of SoftBank Group International, will purchase 5 million shares after they are sold to T-Mobile, the company said in an SEC filing. Claure will buy the shares with proceeds of a loan from SoftBank according to T-Mobile.

In a second sale, SoftBank will give T-Mobile’s parent Deutsche Telekom the option to purchase another 101 million shares, worth around $10.8 billion, until June 22, 2024.

If both transactions are completed, SoftBank’s stake in T-Mobile will fall from about 24% to less than 0.4%.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.