SoftBank, generally known as Japan’s third largest mobile carrier, is planning to expand its influence beyond the country, and it seems like the government is eager to help them out in this pursuit, to the tune of 300 billion yen (approx. US$3 billion). This loan ponied up by government banking institutions and private financial houses will be set aside for SoftBank’s search for new foreign acquisitions and investments.
It’s not much of a secret that most of this amount will be used for injecting much needed funds into the company as it looks to recover from the mega-purchase they did in July, acquiring 70 percent of United States mobile carrier Sprint. That alone cost SoftBank over US$21 billion, and was the largest foreign acquisition a Japanese company has ever done. They had a lot of help in that monstrous venture, as they sought out nearly 20 different banks to help pay off the purchase. For this current loan, both the Japan Bank for International Cooperation and Development Bank of Japan are making their funds available to offer for the loan, as reported in the Nikkei. Private banks Mizuho Bank and Sumitomo Mitsui Banking Corp are also reportedly helping in this venture.
Some industry experts and analysts in have questioned this move, as it is common knowledge that SoftBank is now heavily indebted because of the Sprint purchase, and that it would take a period of time for the mobile carrier to recover from such a huge financial outlay. But outspoken SoftBank president Masayoshi Son has rebuffed these questions, arguing the viability of their businesses and the soundness of his business practices. This, Son says, is clearly seen in the willingness of these financial institutions to take the risk and loan him the money. This fall season looks to be huge for the mobile carrier, as Apple has already released its new batch of phones – the iPhone 5s and iPhone 5c – both of which SoftBank will have in its catalogs. It remains to be seen, however, how the sales would be affected as it has lost total exclusivity to Apple’s phones – major competitors KDDI and NTT Docomo will also be carrying the new units.
[via Techno Buffalo]