Japanese telecommunications and internet firm Softbank Group Corp says it will sell at least $US7.9 billion ($A11 billion) of shares in Chinese e-commerce company Alibaba Group in order to raise funds to reduce its debt.
The transaction marks the first sale of Alibaba shares by its largest shareholder since Softbank began investing in the company in 2000.
Softbank's Alibaba stake will fall to about 28 per cent of the Chinese firm from 32.2 per cent in March.
Both companies said they would maintain a strategic partnership. Softbank Chairman and Chief Executive Masayoshi Son will remain a director at Alibaba, while Alibaba Executive Chairman Jack Ma will remain on the board of Softbank.
Shares of Alibaba fell 2.8 per cent in extended trading on Tuesday.
The deal includes a $US2 billion sale of shares to Alibaba itself, a sale of $US400 million in shares to the Alibaba Partnership, a 34-person group made up of Ma and other Alibaba founders and executives, a $US500 million sale of shares to an unidentified sovereign wealth fund, and an offering by a new Softbank-controlled trust of $US5 billion to $US6 billion in securities that convert in three years into Alibaba stock, Softbank said.
Stifel analyst Scott Devitt in a note said that he maintained a "buy" rating on Alibaba after the Softbank sale.
"We do not view this as a shift in confidence from a major investor. In fact, it could remove an overhang of expectation of such an event," he wrote.
Alibaba unnerved investors last week when it reported that the US Securities and Exchange Commission was investigating its accounting practices for its stake in a logistics firm, related-party transactions, and operating data of its annual "Singles' Day" sale.
Softbank, owner of US telecom company Sprint Corp, said the stock sales were part of a "transformational strategy" to increase its own liquidity cushion and "enable flexible and prudent financial management."
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