Telecom giant Softbank unveils $21bn IPO mobile unit

Softbank Group Corp. on Monday said it would seek to raise more than $20 billion with the initial public offering of its Japanese mobile unit, as it hunts for funds to fuel its nearly $100bn investment machine.

The unit, SoftBank Corp, will list on Dec. 19, the filing with the Ministry of Finance showed.

The IPO will mark the transformation of the parent from a mobile phone network provider - which successfully challenged Japan’s incumbent duopoly - into one of the world’s biggest technology investors under Chief Executive Masayoshi Son.

The offering will provide the group with even more funds that can be deployed into global tech investments. SoftBank’s bets so far have been as varied as small gaming startups, ride-hailing firms such as Uber Technologies Inc, and e-commerce behemoth Alibaba Group Holding Ltd.

SoftBank Group said it received approval from the Tokyo Stock Exchange to float the mobile unit on Dec. 19 and planned to sell as much as 36% of the unit. The listing could raise as much as ¥2.6 trillion ($23 billion) in case of high demand.

On sale is 1.6 billion SoftBank Corp shares at a tentative price of 1,500 yen each, raising 2.4 trillion yen. The unit will have a market value of 7.18 trillion yen upon listing.

Additionally, up to 160 million shares worth 240.6 billion yen will be offered in an overallotment if demand is strong. In that case, the total would come close to the $25 billion worth of shares sold by Alibaba in 2014 in the biggest-ever IPO.

With backing from Saudi Arabia, SoftBank runs the SoftBank Vision Fund and its affiliate Delta Fund. Together those funds command $98 billion in the capital.

Total debt at SoftBank was close to ¥18 trillion at Sept. 30, compared with ¥3.2 trillion in cash and cash equivalents. Much of the debt is tied to the Japanese mobile unit and SprintCorp. in the U.S., which is controlled by SoftBank Group. The initial public offering of the mobile arm, along with a planned deal to sell control of Sprint to T-Mobile US Inc., would help SoftBank Group lower its debt. The T-Mobile deal is awaiting regulatory approval.