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SoftBank

SoftBank in talks with Mizuho and Japan banks for $2.8bn loan

Group seeks additional funds as it looks to turn around WeWork

SoftBank Group chief Masayoshi Son needs to turnaround WeWork to convince investors to support his second Vision Fund.    © Reuters

TOKYO -- SoftBank Group is in talks to receive about 300 billion yen ($2.76 billion) in financing from Japan's leading banks, Nikkei has learned, as the company scrambles to fund a turnaround at coworking startup WeWork.

SoftBank is planning an up to $3 billion tender offer to raise its stake in WeWork parent We Co. It could provide an additional $3.3 billion to We through loans and other methods.

Although SoftBank has more than 2 trillion yen on hand, it is considering borrowing additional funds so it can maintain a certain level of cash reserves.

For banks -- including SoftBank's main lender, Mizuho Financial Group -- this presents a rare moneymaking opportunity amid Japan's ultralow interest rates.

But some leading Japanese banks that have already lent large amounts of money to SoftBank are cautious about taking on further risk.

The banks are also investors in the SoftBank Vision Fund, which suffered a massive loss over We's aborted initial public offering, and are weighing investments in a second fund proposed by SoftBank. WeWork's turnaround prospects could sway their final decision.

Founded in 2010, WeWork signs long-term leases on office space around the world, which it subleases to individuals and businesses. It now operates in 29 countries.

Doubts about its profitability threw a wrench in its IPO plans, and the startup had been struggling to fund its operations. SoftBank and its Vision Fund previously invested a combined $9.15 billion in We.

The group committed to additional investments last month to prevent further losses at the startup, but We's long-term outlook remains unclear.

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