SoftBank CEO has now pledged 60% of shares as collateral

SoftBank founder Masayoshi Son has pledged extra shares in his telecoms-to-internet firm, taking it to about 60%, as collateral towards private loans in March, the Monetary Occasions reported final week.

The group’s depreciating market worth exposes Son to margin calls, the paper mentioned. The event comes at a time when SoftBank is struggling to lift new capital for the second version of the $100 billion Imaginative and prescient Fund amid a bunch of its portfolio startups struggling to outlive because the WeWork debacle final yr.

“Son pledged a further 57 million SoftBank shares to international banks, together with Credit score Suisse, Daiwa, Nomura and Mizuho, because the coronavirus market turmoil uncovered the SoftBank founder as one of many world’s most closely leveraged businessmen,” FT mentioned in its report.

Son, who immediately holds 462 million shares in SoftBank, now has pledged as a lot as 280 million of it as of March 19, as per an evaluation of securities filings carried out by the Monetary Occasions. As of March 27, Son’s web price was estimated at $12 billion, excluding the worth of his pledged shares, as per Newpaper24, falling $3.6 billion to date this yr.

Particular to SoftBank’s India portfolio, Masa is reported to have personally assured a $2 billion mortgage which resort chain operator Oyo’s founder Ritesh Agarwal had picked up final yr. This can be one other level of fear for Masa if the valuation of Oyo slumps and monetary establishments might ask for extra collaterals.

―Newpaper24