Japan's SoftBank Group Corp said on Tuesday it expects a gain of 1.2 trillion yen ($11.12 billion) to its pre-tax profit as it closes a three-year-old deal to sell a part of its stake in Chinese technology giant Alibaba.
The Masayoshi Son led company said it will book the profit in the quarter ending June.
SoftBank initiated the sale in June 2016, when the VC firm and telecom giant said it had approved a series of ‘capital raising transactions' that involved selling shares in Alibaba, which was then worth at least $7.9 billion.
The investment giant, which has been the biggest shareholder of the Chinese ecommerce giant, has been selling the shares for the first time in 16 years. Closing the deal leaves SoftBank with a 26 percent stake in Alibaba, which is worth $101 billion.
SoftBank invested in Alibaba Group in 2000, and eventually became the largest shareholder in the company. Over the years, the two companies have built a close relationship through business partnerships, joint ventures, joint investments, and other collaborations.
Last month, Uber, one of SoftBank’s largest investments, went public in an underwhelming debut. The company reported a loss of $1 billion in its first quarter after the IPO.
SoftBank recorded 418 million yen gain with regard to Uber’s initial public offering for the fiscal year ending March 2019.
The Japanese conglomerate is one of the biggest investors in the Indian startup ecosystem, and has booked an 80.5 percent rise in operating profit for the year ending March 2019, helped by valuation gains from its investment in companies like OYO and Uber.
In the domestic startup ecosystem, the company has so far made some key investments in companies including ride-hailing aggregator Ola, hotel booking platform OYO, and fintech giant Paytm.
SoftBank's operating profit rose to 2.4 trillion yen ($22 billion) driven by its aggressive investments in technology globally, powered by its $100 billion Vision Fund. In the same quarter last year, the company reported an operating profit of $715 billion.
SoftBank's shares closed down three percent on Tuesday.