Japan-based internet and telecommunications conglomerate SoftBank expects to write down at least $5bn from its investments in portfolio companies including Uber and We Company, Bloomberg reported yesterday.
The losses will be revealed when the corporate releases its next quarterly earnings report on November 6, according to people familiar with the matter, who predicted the writedown could potentially be as high as $7bn.
SoftBank has now provided $18.5bn in debt and equity financing for We Company, the owner of workspace provider WeWork, according to comments made yesterday by Marcelo Claure, SoftBank’s chief operating officer and now We Company’s chairman.
We Co’s initial public offering stalled last month, meaning SoftBank had to provide a $9.5bn financing package to ensure the company remained solvent. That capital was reportedly supplied at a valuation of $7.5bn to $8bn, in contrast to the $47bn valuation at which SoftBank invested in January this year.
Ride hailing service Uber has meanwhile seen its share price fall some 25% since it went public in May 2019 at an $82.4bn valuation. SoftBank led a consortium that invested $1.25bn at a $68bn valuation in 2017 together with a $7.2bn secondary share purchase at a $48bn valuation.
SoftBank’s $98.6bn Vision Fund is also a substantial shareholder in both companies, and the decline in the share price of both Uber and key rival Lyft has reportedly led it to internally adjust the valuations of its investments in on-demand ride providers Grab and Didi Chuxing.
Vision Fund is currently in the process of raising money for a second vehicle and secured memoranda of understanding for $108bn in July this year.
