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SoftBank mobile unit eyes July filing for IPO

Tokyo listing will raise capital for Masayoshi Son's tech investment ambitions

SoftBank Group Chairman Masayoshi Son gave up representative rights at the Japanese wireless unit in April to ease concerns about its independence.

TOKYO -- SoftBank Group will apply to list its Japanese wireless carrier subsidiary on the Tokyo Stock Exchange as early as next month, seeking to raise capital to quicken the group's transformation into a technology investment company.

The namesake unit may debut on the TSE's first section by year-end. The parent would list a partial stake in the wholly owned unit, Japan's third-largest wireless carrier by subscribers.

SoftBank has rebranded itself as a tech investment house in recent years, a transition marked by its 2016 acquisition of British chip designer Arm Holdings and the launch last year of the $100 billion Vision Fund. Even before this pivot, the company placed early, lucrative bets on Yahoo Japan and Alibaba.

SoftBank's investment strategy focuses on unicorns, or unlisted startups valued at $1 billion or more. "We are unicorn hunters," founder and CEO Masayoshi Son said at the company's annual shareholders meeting last week.

The Saudi-backed Vision Fund has invested in around 30 companies in fields such as artificial intelligence and the "internet of things." The portfolio includes U.S. graphics chipmaker Nvidia and Brain, a maker of self-driving cleaning robots. SoftBank has also made notable investments in ride-sharing, including in Uber, Didi Chuxing and Grab.

Yet the initial public offering is expected to attract investors on its own merits. What the Japanese wireless business lacks in growth potential it makes up for in earnings stability. The segment logged operating profit of about 680 billion yen ($6.18 billion) for the fiscal year ended in March and generates annual free cash flow of around 500 billion yen.

Dual parent-subsidiary listings have become less common in Japan as the corporate sector embraces good governance and capital efficiency. The parent company in such arrangements often prioritizes its own profits to the detriment of minority shareholders in the subsidiary.

SoftBank Group says it intends to ensure the mobile unit's independence after an IPO, a factor the TSE will consider as it reviews the listing application.

Son gave up his representative rights at the subsidiary in April, and the holding company plans to remove the carrier's guarantee from bonds and loans once the listing is approved.

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