SoftBank sees $11.9b net loss on WeWork writedown

SoftBank has poured more than US$13.5 billion into WeWork, one of a string of troubled bets by CEO Masayoshi Son. PHOTO: REUTERS

TOKYO (REUTERS) - SoftBank Group said it sees a loss of around 700 billion yen (S$9.26 billion) in the year ending March on the portion of its WeWork investment held outside the Vision Fund, extending the group's expected net loss to 900 billion yen (S$11.9 billion).

SoftBank maintained its forecast of a record annual operating loss of 1.35 trillion yen announced earlier this month as bets via the US$100 billion (S$141.2 billion) fund sour.

SoftBank is embroiled in a legal dispute with directors at WeWork after backing out of a US$3 billion tender offer agreed when it bailed out the office-sharing firm after a flopped IPO attempt last year.

The tech conglomerate has poured more than US$13.5 billion into WeWork, one of a string of troubled bets by CEO Masayoshi Son that have laid waste to SoftBank's full year earnings and are now being hammered by the coronavirus pandemic.

SoftBank's shares were up 2.4 per cent in early trading, in line with the benchmark index.

The group has launched a record 2.5 trillion yen buyback to support its shares, which CEO Son uses as collateral for loans.

The highly leveraged conglomerate has been forced into selling down major assets to raise funds, but could receive a big boost from the Bank of Japan's plan to expand corporate bond buying.

SoftBank was sitting on around US$160 billion of interest bearing debt at the end of December and has seen bond yields rise as high as 4.5 per cent this month.

Portfolio companies are continuing to retreat from a SoftBank-cash fuelled push for breakneck growth, with Indian hotel chain Oyo planning to offload more properties around the world, sources told Reuters this week.

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