SoftBank Group said on Wednesday it would book a gain of $34.1 billion by cutting its stake in Alibaba Group Holding, as the investment behemoth looks to shore up its cash reserve to weather the market downturn, reports Reuters. The Japanese company will reduce its stake in Alibaba to 14.6% from 23.7% by settling prepaid forward contracts. Alibaba’s US-listed shares were down 1.3% in early trade.
SoftBank booked a $50 billion loss at its Vision Fund investment arm in the first half of the year as its tech bets soured, with Chief Executive Masayoshi Son on Monday pledging to further reduce investment activity and cut costs.
By settling the Alibaba share contracts, SoftBank “will be able to eliminate concerns about future cash outflows, and furthermore, reduce costs associated with these prepaid forward contracts,” it said in a filing.