SoftBank looks to sell its stake in T-Mobile U.S as annual operating loss expands to £10.42 billion

The Wall Street Journal revealed on Monday that SoftBank Group Corp. (TYO: 9984) is negotiating with Deutsche Telekom AG (ETR: DTE) to sell a sizeable chunk of its investment in T-Mobile U.S. Deutsche Telekom currently has a controlling stake in the American wireless network operator.  

As per the newspaper, following the agreement, Deutsche Telekom’s investment in T-Mobile U.S will expand by 50%. In April, T-Mobile also finalised its merger with another telecommunications company on SoftBank’s portfolio, Sprint, after receiving approval from regulators that had originally expressed concerns of a threat to fair competition due to the merger.

Softbank has a 24% stake in T-Mobile U.S.

SoftBank currently has a 24% stake in the U.S network operator. The WSJ did not specify how much of this stake is the Japanese conglomerate seeking to sell or the money it will raise from the sale.  

Deutsche Telekom and SoftBank have not commented any further on the news so far.

As per experts, the Masayoshi son’s conglomerate is likely to monetise its stake in T-Mobile. The struggling tech investing empire is currently committed to raising around £33.6 billion via asset sales to shore up its finances. The company plans on directing the raised funds to its planned £3.86 billion of share buyback next year.

Following the announcement, SoftBank was reported around 1.8% up in afternoon trading. At £35 per share, it is currently about 1% up year to date in the stock market after recovering from £20.5 per share in March. SoftBank is presently valued at £70 billion and has a price to earnings ratio of 31.

SoftBank reports £10.42 billion in annual operating loss

In separate news, SoftBank announced that the founder of Alibaba, Jack Ma, resigned from its board on Monday. The company also posted £10.42 billion in annual operating loss this morning. In the fiscal year that ended in March, SoftBank’s affiliated funds including its renowned £82 billion Vision Fund saw £14.53 billion losses as portfolio companies including WeWork and Uber took a significant hit due to COVID-19.

The news comes only a week after Deutsche Telekom released its quarterly financial results that showed the company to have generated stronger than expected profit and revenue in the first quarter. The confidence of the upbeat Q1 results also saw the German telecommunications giant maintaining its financial guidance for 2020.