Article by: anees
SoftBank Group Raises Nearly 3 Trillion Yen With Alibaba - Stock Prepaid Forward Contract - Report
(Bloomberg) -- SoftBank Group Corp. has announced that it will offer up to $22 billion in cash in the sale of Alibaba Group shares through a transaction called a "forward contract," a type of derivative. procured. The report was based on information from a notification that was confirmed by the Financial Times (FT).
According to the FT, SoftBank Group has sold about a third of its stake in Alibaba through prepaid forward contracts since the beginning of this year. The agreement allows for immediate cash while still allowing the company to retain the stake. SoftBank Group has taken advantage of this and has so far sold more than half of its Alibaba shares.
It could also reduce its stake to below the level needed to maintain a board post and prevent Alibaba profits from appearing in its own financial statements, the people said.
Banks such as Mizuho, Goldman Sachs, and UBS participated in the sale of 213 million Alibaba shares through prepaid forward contracts earlier this year. In most cases, the final delivery is about two years away.
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