SoftBank monetises investments as telco IPO looms

Japan`s SoftBank Group Corp on Monday reported a 49 percent rise in first-quarter operating profit, boosted by the sale of its stake in Indian e-commerce firm Flipkart - the first public divestment by its Vision Fund.

The technology firm, which is planning an initial public offering (IPO) for its domestic telecoms unit, also said profit was bolstered by the sale of the majority of chip designer ARM Holding`s Chinese operations to a local consortium.

The sale of the stakes are early signs that SoftBank is able to monetise its investments - a key concern for investors that have seen billions of dollars pumped into tech companies around the world but little profit-taking.

SoftBank`s Saudi-Arabian backed Vision Fund, the world`s largest private equity fund, has invested $27.1 billion in 29 companies at the end of June.

The Vision Fund is yet to complete its final close, SoftBank said on Monday. It raised over $93 billion at its first close in May last year.

The fund`s stakes are now worth $32.5 billion on rising values of investments such as co-working firm WeWork Cos, SoftBank said.

The Japanese joint venture between SoftBank and WeWork is opening locations across Japan and rising numbers of SoftBank employees are based in the shared working spaces, Chief Executive Masayoshi Son said on Monday.

"We are considering moving all of SoftBank`s headquarters into WeWork (offices) in the near future," Son said.

To feed its insatiable investing activities SoftBank is preparing to raise more cash by listing its domestic telecoms unit in what could be Japan`s largest-ever IPO.

Ahead of the listing, analysts are closely watching earnings at the telecom unit, which faces a new rival in the form of e-commerce firm Rakuten Inc with ambitions become Japan`s fourth wireless carrier.

Sales at the unit grew 4.6 percent in the quarter to June, with profit up 0.7 percent.

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Son has previously said a second Vision Fund is coming, but on Monday declined to be drawn on its timing and size.

Profit for the three months through June was 715 billion yen ($6.42 billion) from 479 billion yen a year earlier, SoftBank said.

SoftBank did not release a forecast for the current business year, saying there were too many uncertain factors.