Establishment of Joint Venture with Foxconn
February 24, 2017
SoftBank Group Corp.
SoftBank Group Corp. (“SBG”) announced that, on February 24, 2017, it entered into a definitive agreement with Foxconn Technology Group (“Foxconn”) to establish a joint venture through its wholly owned subsidiary, SOFTBANK GROUP CAPITAL APAC PTE. LTD. (“SOFTBANK GROUP CAPITAL APAC”), as further described below (the “Transaction”). As a result, SOFTBANK GROUP CAPITAL APAC is expected to become an equity method associate of SBG and no longer qualify as an SBG subsidiary.
1. Transaction Purpose
Foxconn and SBG have agreed to jointly promote investments under the leadership of Foxconn. Foxconn and SBG have concluded that integrating SBG's investment expertise into Foxconn's global presence and network is expected to convey new insights into, and enable them to demonstrate their competitiveness in, investment activities.
2. Transaction Method
SOFTBANK GROUP CAPITAL APAC, a wholly owned subsidiary of SBG, is expected to issue, on March 1, 2017, 96,268 new ordinary shares to Foxconn (Far East) Limited (“FFE”), a wholly owned subsidiary of Hon Hai Precision Ind. Co., Ltd. (the listed and the parent company for Foxconn) in exchange for USD 600 million. Consequently, SOFTBANK GROUP CAPITAL APAC will be categorized as a joint venture. The voting ratio of SOFTBANK GROUP CAPITAL APAC upon completion of the Transaction is expected to be 54.5% for FFE and 45.5% for SBG.
3. Outline of SOFTBANK GROUP CAPITAL APAC
|(1) Trade name||SOFTBANK GROUP CAPITAL APAC PTE. LTD.|
|(2) Address||80 Robinson Road, #02-00, Singapore 068898|
|(3) Name of representative||Alok Sama, Jonathan Bullock, Tay Tuan Leng|
|(4) Nature of business||Holding company|
|(5) Share capital||USD 47 thousand (as of January 31, 2017)|
|(6) Founded||January 22, 2000|
|(7) Shareholders and its holdings||SoftBank Group Corp.: 100%|
|(8) Relations with SBG||Capital||SBG as the parent company owns 100% voting rights of the company.|
|Personnel||Alok Sama serves as President and CFO of SoftBank Group Capital Limited, a wholly owned subsidiary of SBG. Jonathan Bullock serves as Director of SB Group US, Inc., a wholly owned subsidiary of SBG.|
|(9) Results of operations and financial position
(Millions of U.S. dollars)
|Fiscal Year Ended March 2014||Fiscal Year Ended March 2015||Fiscal Year Ended March 2016|
|Net income (loss)||1||(1)||0|
- *A large portion of SOFTBANK GROUP CAPITAL APAC assets have been transferred to SBG since April 2016. The net assets of SOFTBANK GROUP CAPITAL APAC just before the Transaction are expected to be approximately USD 500 million (market value- based).
4. Number of Voting Rights (Shares Held) and Voting Rights Ratio Before and After the Transaction
|Category||Number of Shares Held by SBG||SBG's Voting Rights Ratio to the Total|
|(1) Before the Transaction||Subsidiary||80,223 shares
(Number of voting rights: 80,223)
|(2) After the Transaction||Associate||80,223 shares
(Number of voting rights: 80,223)
- *1SOFTBANK GROUP CAPITAL APAC is expected to issue 96,268 new ordinary shares to FFE, as described in “2. Transaction Method” above.
- *2SBG's voting rights ratio to the total voting rights after the Transaction is calculated based on the total number of voting rights (176,491 rights), which includes additional voting rights (96,268 rights) due to the new share issuance (96,268 shares) by SOFTBANK GROUP CAPITAL APAC, as described in “2. Transaction Method” above.
- *3The voting rights ratios to the total are rounded to one decimal places.
5. Expected Date of the Transaction
March 1, 2017
6. Future Outlook
SBG does not expect to record any profit or loss to which the disclosure requirements stipulated by Tokyo Stock Exchange apply.
Consolidated financial results forecast for the fiscal year ending March 2017 and actual for the fiscal year ended March 2016
|Net sales||Operating Income||Net Income Attributable to Owners of the Parent|
|Forecast for the fiscal year ending March 2017||-||-||-|
|Actual for the fiscal year ended March 2016*||9,153,549||999,488||474,172|
- *Net sales and operating income are presented based on the amounts from continuing operations only, excluding those from discontinuing operations.
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