SoftBank to make more than $34 billion from selling Alibaba

SoftBank Group Corp. expects to make a gain of more than $34 billion from selling its stake in Alibaba Group Holding Ltd., cashing in a chunk of its most storied investment to shore up finances as global markets deteriorate.

The Japanese investment giants board approved Wednesday the early physical settlement of prepaid forward contracts corresponding to about 242 million American Depositary Receipts. After the settlement, which will run from August to September, its stake in China's e-commerce leader will fall to 14.6% from 23.7% at the end of June.

Masayoshi Son has accelerated the sale of assets this year, speeding the transformation of his conglomerate into a pure investment house. One of the most lucrative bets in venture capital history was made by investors by the fact that SoftBank has been pressed to cash in its shares in Alibaba.

SoftBank had previously raised a huge amount of capital by selling forward contracts on Alibaba, taking in $10.5 billion and another $6.8 billion through such contracts on and after July 1.

SoftBank will have to relinquish its right to buy back the stock after Physically settling the contracts. In the past, when SoftBank provided funds through its Alibaba stake, the company had the option to buy back the shares it released through the forward contracts.

It was a rare moment when SoftBank committed to lowering its Alibaba holdings in 2016 when it needed to finance its acquisition of chip architect Arm Ltd.

Son is now paring other holdings as he concentrates on the eventual initial public offering of the British chip design giant. SoftBank is selling part or all of its 9% stake in SoFi Technologies Inc and is in talks to sell asset manager Fortress Investment Group.