It just cross my mind. Do these companies with plans to launch global satellite constellations need to get permission from every country in the world? Cuz air space permissions and violations?! Or it doesnât apply cuz of altitude?! Superpowers clash over this?!
âSoftBank plans $41bn asset sale to cut debt amid coronavirus tumultâ - FT
Response to halving of share price includes plan to repurchase „2tn of its own stock
SoftBank is launching an emergency „4.5tn ($41bn) asset sale to fund a share buyback and debt reduction, in a determined effort by Masayoshi Son to stem a collapse in the companyâs share price sparked by the coronavirus crisis.
Shares in the Japanese technology group soared almost 19 per cent on Monday after it unveiled the programme, which includes a plan to repurchase „2tn of its own shares on top of the „500bn buyback it promised 10 days ago. Combined, SoftBank would be repurchasing 45 per cent of its stock.
âThis programme will be the largest share buyback and will result in the largest increase in cash balance in the history of SBG [SoftBank Group], reflecting the firm and unwavering confidence we have in our business,â Mr Son, the groupâs founder and chief executive, said in a statement.
SoftBank did not disclose which assets it would sell over the next 12 months from its sprawling portfolio, but analysts are focusing on its $140bn stake in Chinese ecommerce group Alibaba.
The asset sale comes amid a tumultuous period for the Japanese conglomerate. On Monday the Financial Times reported that Leon Blackâs Apollo Global Management hedge funds had placed a large short bet against bonds issued by SoftBank, a trade that Apollo had discussed with investors at a presentation in December, according to two people in attendance, citing concerns over SoftBankâs debt load.
Meanwhile, the conglomerateâs woes over its investment in lossmaking office space provider WeWork entered a newly acrimonious phase this week, as two of WeWorkâs directors, Bruce Dunlevie and Lew Frankfort, publicly attacked the Japanese conglomerate over its attempts to renege on an agreed purchase of $3bn of WeWorkâs stock.
âNot only is SoftBank obligated to consummate the tender offer as detailed by the master transaction agreement, but its excuses for not trying to close are inappropriate and dishonest,â the pair said on Sunday.
SoftBankâs new programme would represent about 17 per cent of the $245bn in assets SoftBank currently owns, which also includes US carrier Sprint and UK chip designer Arm.
Elliott Management, the $40bn US activist fund, recently built a $2.5bn stake in SoftBank, demanding a $20bn share buyback and greater transparency for the $100bn Vision Fund.
SoftBankâs share price has halved over the past month due to market concerns that the group, which is already saddled with net debt of $55bn, will face a bigger financial burden as its investments in ride-hailing and hotel groups are hit by the economic fallout of the coronavirus pandemic.
Among its other investments backed by its Vision Fund, Oyo Hotels, the Indian hospitality start-up, is reducing its workforce in China, while operating losses at London-based tech company Improbable Worlds jumped almost two-thirds in its latest financial year.
âWe know that the Vision Fund could be dangerous but we donât know where or how much,â said Kirk Boodry, a tech analyst at Redex Holdings who publishes on research platform Smartkarma. âWhen the bad things come out, people are now ready to have something to fall back on.â
SoftBank paired its share buyback announcement with a plan to pay down its debt, a move that came after credit-rating agency S&P Global recently cut its outlook on the company.
Moodyâs puts Softbankâs credit rating further into the junk territory
Rating Action: Moodyâs downgrades SoftBank Group to Ba3; places ratings on review for further downgrade The document has been translated in other languages
25 Mar 2020
Tokyo, March 25, 2020 â Moodyâs Japan K.K. has downgraded SoftBank Group Corp.'s (SBG) corporate family rating (CFR) and senior unsecured rating to Ba3 from Ba1, and its subordinate rating to B2 from Ba3.
At the same time, Moodyâs has placed the ratings under review for further downgrade.
The affected ratings and issuers are listed at the end of this press release.
The rating action follows SBGâs announcement on 23 March 2020 that it will monetize up to JPY4.5 trillion (about $41 billion) of its investment portfolio and use the proceeds to repurchase up to JPY2 trillion ($18 billion) of its own shares. It will use the remaining JPY2.5 trillion ($23 billion) to pay back its debt at the holding company. The company plans to execute these transactions over the next four quarters.
SBGâs latest share repurchase plan is four times the JPY0.5 trillion share repurchase it announced less than two weeks ago.
RATINGS RATIONALE
The two-notch downgrade to Ba3 reflects SBGâs aggressive financial policy, as reflected by the unexpected size and apparent urgency of the rapid series of share repurchases, just as the drop in the stock market has put the value and liquidity of its portfolio value under stress.
âAsset sales will be challenging in the current financial market downturn, with valuations falling and a flight to quality,â says Motoki Yanase, a Moodyâs Vice President and Senior Credit Officer.
In particular, the value and credit quality of SBGâs portfolio would deteriorate if the company reduces some of its most liquid and highly-valued listed investments, such as its stakes in Alibaba Group Holding Limited (A1 stable), SoftBank Corp. and Sprint Corporation (B2, review for upgrade). It is unclear why SBG is undertaking such a dramatic recapitalization during a time of severe stock and market volatility. Monetizing a significant part of its investment at this time risks a discount as well as a deterioration in the quality and value of its remaining portfolio.
The review for further downgrade considers the volatile capital market conditions that could weaken the valuation of SBGâs investee companies, hinder the execution of its recapitalization plan, and weaken SBGâs leverage and liquidity position.
Moodyâs review will focus on (1) the extent to which the fall in financial markets erodes the value and credit quality of the investment portfolio that covers SBGâs debt; (2) the timing and the amount of asset sales the company is able to execute under the current market conditions, as well as the credit quality of its remaining investment portfolio; and (3) the change in SBGâs capital structure as it repurchases stock, pays down debt and increases secured obligations such as margin loans.
In addition, Moodyâs recognizes SBGâs substantial JPY1.7 trillion (about $15 billion) of cash balance that covers the next two yearsâ scheduled debt maturities. Downward rating pressure would build if this liquidity cushion weakens.
Given the ratings are on review for downgrade, Moodyâs does not expect upward rating pressure in the foreseeable future. An upgrade is possible longer term if the SBG executes on its recapitalization and demonstrates greater transparency and sustainability of its assets and capital structure.
Moodyâs would consider a further downward rating action if 1) there is a significant deterioration in the credit quality of SBGâs investee companies, including difficulty in turning around WeWork; 2) cash held at the holding company level diminishes, such that its cash and committed credit facilities no longer cover two years of debt maturities; and 3) there is increase in debt, including margin loans and crystallization of legal or other contingent obligations.
The principal methodology used in these ratings was Investment Holding Companies and Conglomerates (Japanese) published in August 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
Headquartered in Tokyo, SoftBank Group Corp. is a Japanese holding company, with subsidiaries engaged in various businesses, including telecommunications, internet and other technology businesses.
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SoftBank has demanded that Moodyâs remove all of its bond ratings on the Japanese conglomerate, after the rating agency issued a two-notch downgrade that cut its debt deeper into junk status.
The group led by Masayoshi Son, the risk-seeking Japanese dealmaker, immediately accused Moodyâs on Wednesday of having âbiased and mistaken viewsâ.
The downgrade came two days after SoftBank said it planned to sell $41bn of its assets to pay down its heavy debt load and to hugely increase the scale of a share buyback.
Those actions have triggered a 55 per cent jump in SoftBank share price, which fell to a four-year low last week as investors panicked over its hefty debt exposure.
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FT:
OneWeb, the satellite internet start-up, is preparing for bankruptcy and to lay off most of its staff, after failing to secure new funding from investors including its biggest backer SoftBank, according to people familiar with the situation.
Link - OneWeb collapses after SoftBank funding talks fall through
SoftBank Investment Advisers, which oversees the $100 billion Vision Fund, lost another senior member of its team, according to people with knowledge of the matter. This time itâs Carolina Brochado, who was promoted to partner just last month.
The London-based partner resigned this week after bonuses were paid on March 31, said the people, who asked not to be identified discussing personnel issues. She wonât leave immediately and will help with the transition of her responsibilities, one of the people said
Vision Fund employees have described the company culture as one that rewards aggression and recklessness, Bloomberg Businessweek reported in December. SoftBankâs investments have reshaped Silicon Valleyâs startup environment in recent years, but the company is struggling to raise outside capital for the second Vision Fund. This week, SoftBank abandoned an agreement to buy additional WeWork stock from the startupâs shareholders.
Brochado joined SoftBank early last year, and according to her LinkedIn profile, her investments at SoftBank included Brazilian fitness startup Gympass and Behavox, a compliance and employee-monitoring software company that in February raised $100 million from SoftBank Vision Fund II.
FT:
âŠIts shares were falling rapidly as investors speculated that Mr Son, who famously lost $70bn in the dotcom crash, was facing another reckoning.
âŠ
⊠last year, Mr Son pledged some of his stake as collateral to help the founder of Indiaâs Oyo secure funds to boost his position in the hotel start-up. The deal doubled the valuation of lossmaking Oyo to $10bn from the level the Vision Fund had invested in it.If SoftBankâs shares kept falling, banks would demand Mr Son put up more collateral. People close to SoftBank insist no margin calls were made to Mr Son.
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Eventually, Mr Son settled on asset sales that would fund a further $19bn („2tn) buyback. âIn a way, that buyback is a public LBO [leveraged buyout]. Itâs just that changed the source of capital, which was no longer Masa and his consortium partners,â said one of the people involved in the talks. It amounts to 33 per cent of all of SoftBankâs shares outstanding at current valuations.Executives pushed Mr Son to go further, noting that S&P Global had downgraded its outlook on SoftBank debt to negative after the first buyback and telling him that some of the companyâs net debt of $55bn, part of a wider $180bn of borrowing, should also be paid down.
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Veteran equity and credit analysts in Tokyo say they now assume that all three of Japanâs megabanks â MUFG, Mizuho and SMBC, have reached their maximum lending limits with SoftBank after extending tens of billions of dollars of loans.âŠ
Mr Son appears to have stopped writing the outsized cheques that made him the worldâs most aggressive start-up investor. On that Saturday, SoftBank withdrew from talks to further fund OneWeb. It also walked away from a previously agreed $3bn deal to buy shares from WeWork investors, including its co-founder Adam Neumann and Benchmark Capital, on which another $1.1bn SoftBank loan to the company depended.
âŠBut not everyone has been convinced. Ratings group Moodyâs issued a two-notch downgrade of SoftBankâs debt. SoftBank responded by calling Moodyâs views âbiased and mistakenâ, demanding the agency withdraw its rating.
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The issue with the current strategy, according to one adviser, is that: âIt is not a strategic move forward. Itâs too defensive for Son. I would not be surprised if we see him announcing some acquisitions â probably in the 5G and telecoms space and potentially big.â
SoftBank expects its $100 billion Vision Fund to book a loss of $16.5 billion due to the worsening performance of its tech bets, which will tip the group as a whole into its first loss for 15 years.
A third consecutive quarter of losses by the Saudi Arabian-backed fund will push SoftBank to an annual operating loss of $12.5 billion, it said in a statement on Monday.
The fundâs dire performance, which SoftBank attributed to âthe deteriorating market environmentâ as markets are hammered by the coronavirus crisis, is a major blow to CEO Masayoshi Sonâs attempts to revive his reputation among investors.
Boston Dynamics, formerly owned by Googleâs X, now owned by SoftBank just put out the first commercial video that Iâve seen from them.
Looks like theyâre launching their robot, this is the first commercial general purpose robot that Iâve seen. This could be the very early start of a new wave of general purpose robots, not unlike when robotic arms were launched, which are now ubiquitous in all modern factories, I have even programmed one myself at work.
ARM (one of the few good softbank acquisitions and British tech jewel) is up for sale. Though I think itâll probably be refloated.
Does anyone know if itâs possible to buy Japanese shares on freetrade yet? I have been waiting for a few companies to be added for actually years at this point. Iâve searched for a couple but no luck
The Tokyo stock market isnât support yet on the platform. European stocks are the next to be shipped then Canadian 
/ Australian 
Aww thatâs a shame, Iâve missed out on a few great opportunities now. Back in 2018 I was told it was in the works 
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