Recognition of Loss on Sale of Shares of Affiliated Companies (as Special Loss) in Non-consolidated Financial Statements
SoftBank Group Corp. (SBG) announces that it expects to recognize a loss of JPY 344.9 billion on sale of shares of affiliated companies as special loss in its non-consolidated financial statements under Japan GAAP for the fiscal year ending March 31, 2016 as follows.
1. Outline of Loss on Sale of Shares of Affiliated Companies
Starburst Ⅰ, Inc. and Galaxy Investment Holdings, Inc. are SBG's wholly-owned subsidiaries that collectively hold 3,312,211,572 shares with 83.5% voting rights as of December 31, 2015 in Sprint Corporation (“Sprint”), a mobile communications company in the U.S.
As announced in “Reorganization of Group Companies” dated March 7, 2016, the investment securities held by SBG will be transferred in phases to SBG's wholly-owned subsidiaries, global operations management company and domestic operations management company. To begin the process, SBG today entered into a share purchase agreement to sell 70.4% shares of Starburst Ⅰ, Inc. and all shares of Galaxy Investment Holdings, Inc. (the “Sale”) to the global operations management company, at the Sale value based on the share price of each company. The share price of each company is based on the value equivalent to each company's net assets obtained by the closing price of Sprint shares at the New York Stock Exchange on March 9, 2016 (EST). The Sale is subject to all the necessary approvals from regulatory, including the Federal Communications Commission (“FCC”).
As a result, SBG expects to recognize a loss that represents the difference between the Sale value and the carrying amount (acquisition value) of each company attributable to the shares sold. The loss amounts to JPY 344.9 billion and it will be recognized as sale of shares of affiliated companies, as special loss, in SBG's non-consolidated financial statements for the fiscal year ending March 31, 2016.
2. Impact on SBG's Consolidated Financial Results
The impact of the Sale on SBG's consolidated financial results will be minor.
(Reference) Holding structure
Before the Sale
After the Sale
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