SoftBank, the biggest Alibabas shareholder, approved of a series of capital raising transactions, which involve monetising a portion of the shares of Alibaba but the the two firms would continue to work together, dnaindia.com reports. The sale will reduce SoftBanks 32.2% holding in Alibaba to about 28%.
Alibaba is buying back at least USD 2 billion worth of the shares that SoftBank is selling, while USD 500 million would be sold to an unnamed major sovereign wealth fund. Another USD 400 million would be sold to the Alibaba Partnership, an investment structured to let SoftBank get cash for its Alibaba shares while maintaining an interest in the stock.
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