The estimated total gain from the Alibaba transaction amounts to 4.6 trillion Japanese yen ($34.1 billion), including 2.4 trillion Japanese yen ($17.8 billion) from a revaluation of the stock, according to SoftBank’s filing.
“By settling these contracts early, SoftBank will be able to eliminate concerns about future cash outflows, and furthermore, reduce costs associated with these prepaid forward contracts. These will further strengthen our defense against the severe market environment,” it said.
Alibaba also reported the SoftBank transaction in an exchange filing late on Wednesday. A spokesperson said Alibaba would not be commenting beyond what was contained in its filing.
SoftBank is also trying to cut costs and raise cash to ride out the market downturn. On Monday, Son signaled cuts to headcount at the Vision Fund, saying there were no “sacred areas.”
“SoftBank is clearly in defense mode,” Jefferies analysts said in a note earlier this week.
Its willingness to sell assets suggests that when “push comes to shove, SoftBank will do or sell anything to protect its own shareholders,” they said, noting that the company is willing to monetize any asset at “a reasonable price.”
“For SoftBank, there are few as liquid and large assets as Alibaba,” they added.