SoftBank Group expects to post a gain of more than $34 billion (¥4.5 trillion) from selling down its stake in Alibaba Group, cashing in on its most storied investment to shore up finances as global markets deteriorate.
The investment giant’s board approved Wednesday the early physical settlement of prepaid forward contracts corresponding to about 242 million American Depositary Receipts. After the settlement, which will run from August to September, its stake in China’s e-commerce leader will fall to 14.6% from 23.7% as of the end of June.
The move raises the likelihood that SoftBank will reduce its stake in Alibaba over time, as the Japanese company’s slice of Alibaba dips below the 20% threshold for counting the Chinese e-commerce giant as an equity affiliate.