SoftBank Group Corp on Wednesday said it will book an estimated gain of 4.6 trillion yen ($34.08 billion) on settling prepaid forward contracts using shares in Alibaba Group Holding, reducing its stake to 14.6% from 23.7%.
The estimated gain includes a 2.4 trillion yen gain from the revaluation of shares in the Chinese e-commerce giant and a derivative gain of 0.7 trillion yen, SoftBank said in a filing.
The transaction "will be able to eliminate concerns about future cash outflows, and furthermore, reduce costs associated with these prepaid forward contracts," SoftBank said.
"These will further strengthen our defence against the severe market environment," SoftBank added.
The Japanese conglomerate on Monday booked a record quarterly net loss due to sliding valuations at the Vision Fund investment arm, with Chief Executive Masayoshi Son pledging to further rein in investment activity and cut costs.
The transaction is not expected to result in additional sales of Alibaba shares on the market as the shares were hedged at the time of the original monetisation, SoftBank said.
($1 = 134.9700 yen)