By Kosaku Narioka
SoftBank Group Corp. shares rose sharply Friday following news that it will reduce its stake in Alibaba Group Holding Ltd., a move that preserves cash at the Japanese tech-investment company.
The shares were recently 5.4% higher at 5,603 yen after rising as much as 6.1% earlier.
SoftBank on Wednesdsay said it plans to settle contracts it has made with financial institutions using Alibaba shares to get cash upfront. It had promised its bankers that it would either pay back the cash later or give them Alibaba shares to settle the contracts. The company has chosen the latter option, it said.
Japanese markets were closed Thursday for a national holiday.
SoftBank said the move would "eliminate concerns about future cash outflows."
The company said its stake in Alibaba was expected to fall to 14.6% by the end of September from 23.7% as of June 30.
SoftBank said it expected a contribution to pretax income of about Y4.6 trillion ($34.58 billion) as a result of its Alibaba share transactions.
Write to Kosaku Narioka at email@example.com
(END) Dow Jones Newswires
August 11, 2022 21:20 ET (01:20 GMT)Copyright (c) 2022 Dow Jones & Company, Inc.