SoftBank to hang up on T-Mobile stake to shore up its balance sheet

What's a flailing investor to do?

SoftBank has begun preparations to offload the bulk of its stake in US mobile carrier T-Mobile as part of the Japanese conglomerate's plan $42bn debt reduction plan.

Rumours of the sale started circulating after the Japanese conglomerate reported a $13bn loss for 2019 last month. SoftBank owns a 24 per cent stake in T-Mobile, a relic of the 85 percent holding it had in Sprint before it merged with its onetime rival. SoftBank's T-Mobile stake is worth around $31bn.

The sale comes as part of the group founder Masayoshi Son's plan to sell off $42bn of assets to buy back shares and shore up its balance sheet. In May, the group said it would raise $11.5bn from contracts to sell shares in its Alibaba stake, its most valuable holding.

Son has previous said that US telco firms are "indispensable infrastructure". But a combination of a bad year for the firm's $100bn Vision Fund and the economic fallout of the coronavirus pandemic has forced the group to focus on its core investments.

SoftBank said it would hit its debt-reduction goal if it is able to sell the T-Mobile stake.

SoftBank's T-Mobile stake is subject to a lock-up agreement that prohibits the group from selling the shares for one year. It is currently in talks with Deutsche Telekom, which holds more than 40 per cent of T-Mobile, to try to lift that restriction. ®