SoftBank founder Masayoshi Son has pledged additional shares in his telecoms-to-internet company, taking it to about 60%, as collateral against personal loans in March, the Financial Times reported last week.
The group’s depreciating market value exposes Son to margin calls, the paper said. The development comes at a time when SoftBank is struggling to raise new capital for the second edition of the $100 billion Vision Fund amid a bunch of its portfolio startups struggling to survive since the WeWork debacle last year.
“Son pledged an additional 57 million SoftBank shares to global banks, including Credit Suisse, Daiwa, Nomura and Mizuho, as the coronavirus market turmoil exposed the SoftBank founder as one of the world’s most heavily leveraged businessmen,” FT said in its report.
Son, who directly holds 462 million shares in SoftBank, now has pledged as much as 280 million of it as of March 19, as per an analysis of securities filings conducted by the Financial Times. As of March 27, Son’s net worth was estimated at $12 billion, excluding the value of his pledged shares, as per Bloomberg, falling $3.6 billion so far this year.
Specific to SoftBank’s India portfolio, Masa is reported to have personally guaranteed a $2 billion loan which hotel chain operator Oyo’s founder Ritesh Agarwal had picked up last year. This may be another point of worry for Masa if the valuation of Oyo slumps and financial institutions may ask for more collaterals.
Read: Fading Vision Fund to tip SoftBank into first loss in 15 years