Press Releases 2004

Notice of the Repurchase of the Outstanding Stock Acquisition Rights and the Issuance of Stock Acquisition Rights by Third Party Allotment

Nov. 30, 2004

SOFTBANK CORP. (the “Company”) announced today that the Board of Directors resolved to repurchase the outstanding 80,000 subscription rights (100 shares per right, exercise price: 4,700 yen per share) at a board meeting held on November 30, 2004. (For details of the relevant subscription rights, please refer to the Notice of the Issuance of Subscription Rights by Third Party Allotment, released on May 27, 2004.)

The relevant subscription rights, which had been originally held by JAPAN TELECOM HOLDINGS L.P., were transferred to Goldman Sachs (Japan) Ltd. (“GS”) as of November 15, 2004. The Company will repurchase such rights at an aggregate price of 3,150 million yen from GS.

Also, this is to announce that the Company’s Board of Directors resolved to issue Stock Acquisition Rights by third party allotment at the board meeting held on November 30, 2004.

These transactions will substantially extend the exercise period of the outstanding subscription rights. The Company will issue the new subscription rights with a setting of the higher exercise price and the longer exercise period in exchange for the former rights.

In addition, the Company received a report from Mr. Masayoshi Son, President & CEO of the Company, stating that he is interested in participating in a hedge transaction to be carried out on the relevant Stock Acquisition Rights by the Goldman Sachs International, the assignee of such rights. For the purpose of taking deliberate action on that matter, Mr. Son did not participate in those decision at the board meeting.

A special loss of 1,490 million yen is expected to be recognized in the third quarter of fiscal year ending March 31, 2005, due to the repurchase of the outstanding subscription rights at an aggregate cost of 3,150 million yen, which had been originally issued at an aggregate issue price of 1,660 million yen.

1. Reason for issuance

The purpose of the issuance is to secure working capital for the Company’s broadband business and to strengthen its equity capital base. Specific amounts will be determined in light of the circumstances under which the payments are made upon exercise of the rights.

2. Outline of the issuance of the Stock Acquisition Rights

(1) Class and number of shares to be issued upon exercise of Stock Acquisition Rights

8,000,000 shares of common stock of the Company (100 shares per each Stock Acquisition Right)

However, the number of shares will be subject to the adjustment provided under (21) (a) below.

(2) Aggregate number of Stock Acquisition Rights to be issued

80,000 units

(3) Issue price of Stock Acquisition Rights

39,375 yen per unit (393.75 yen per share)

(4) Aggregate amount of the issue price of Stock Acquisition Rights

3,150,000,000 yen

(5) Method of offering

Third party allotment

(6) Recipient of allotment and number to be allotted

The Goldman Sachs International; 80,000 units

(7) Application period

December 9, 2004 through December 15, 2004

(8) Payment date

December 16, 2004

(9) Base date for dividend calculation

The payment of initial dividendpayable on the newly issued shares of the Company that are issued as a result of the exercise of the Stock Acquisition Rights shall be made considering as if the shares were issued as of the last day of the fiscal year immediately before the year when the Stock Acquisition Rights are exercised and the payment for such exercise is confirmed at the payment location.

(10) Amount payable upon the exercise of the Stock Acquisition Rights

551,100 yen per unit (5,511 yen per share)

However, the amount will be subject to the adjustment provided under (21) (b) and (c) below.

(11) Aggregate amount payable upon the exercise of the Stock Acquisition Rights

44,088,000,000 yen

(12) Issue price of the shares to be issued upon the exercise of the Stock Acquisition Rights

590,475 yen per unit (5,904.75 yen per share)

(13) Aggregate amount of the issuance price of the shares issued upon the exercise of the Stock Acquisition Rights

47,238,000,000 yen

(14) Amount of equity to be capitalized upon the exercise of the Stock Acquisition Rights

23,624,000,000 yen (295,300 yen per unit, 2,953 yen per share)

(15) Exercise period

December 20, 2004 through December 14, 2007

(16) Condition for the exercise of Stock Acquisition Rights

Any Stock Acquisition Rights under one unit shall not be exercisable.

(17) Event and condition of cancellation of Stock Acquisition Rights

The Company shall be able to cancel the Stock Acquisition Rights from time to time without compensation in case the Company acquires dormant Stock Acquisition Rights.

(18) Transfer restrictions on Stock Acquisition Rights

Any transfer of the Stock Acquisition Rights to third parties excluded affiliated companies of the Goldman Sachs International shall require the approval of the Board of Directors of the Company.

(19) Rationale behind the calculation of the amount payable as issue price and upon the exercise of Stock Acquisition Rights

The base share price shall be set at the closing price of common shares of the Company on November 30, 2004 as traded on the First Section of the Tokyo Stock Exchange. The Company has used the swap rate with a similar maturity to the period remaining in the exercise period, and for volatility, it has used 26.8% after considering market conditions. The calculation was conducted based on the Black-Scholes option pricing model using the aforementioned assumptions to arrive at a 39,375 yen issuance price for each Stock Acquisition Right (393.75 yen per share).

(20) Location for claiming the right to exercise Stock Acquisition Rights

Head office of the Company

(21) Others

  • (a) In the event the Company decides to conduct a stock split or a stock consolidation, of the Stock Acquisition Rights that are not exercised at the time of the stock split or stock consolidation, the number of shares to be issued upon exercise of the Stock Acquisition Rights shall be adjusted by the following formula. Any odd lots under one right shall be rounded off.

    Number of shares after adjustment = Number of shares before adjustment × Ratio of stock split or stock consolidation

  • (b) In the event the Company decides to issue new shares or divest its treasury stock (excluding any exercise of warrants or Stock Acquisition Rights, and/or warrants attached to warrant bonds) at a price below the price of the stock split, stock consolidation or the market price (the "share price before the new share issuance" provided under (c)(IV)) after the issuance of the Stock Acquisition Rights, the exercise price per share shall be adjusted using the following formula, and any amounts under 1 yen shall be rounded up to the nearest yen. Moreover, in the event the Company (I) issues securities that are convertible to the common shares of the Company at a price below market value, (II) issue stock acquisition rights or securities with stock acquisition rights that result in the issuance or transfer of the common shares of the Company at a price below market value, (III) in the event it becomes necessary to adjust the exercise price due to a capital decrease, merger or corporate division, (IV) other than the above, in the event it becomes necessary to adjust the exercise price per share owing to the occurrence of an event that may result in a change or possible change in the number of outstanding shares in issuance, the exercise price per share may be adjusted within the scope deemed necessary and reasonable.

    In the event of a stock split or a stock consolidation
    Exercise price after adjustment = Exercise price before adjustment × (1 / Ratio of stock split or stock consolidation)
    In the event of new share issuance or divesture of treasury stock at a price below the market price
    Exercise price after adjustment = Exercise price before adjustment × [ Number of outstanding shares in issuance + {(Number of new shares to be issued x Amount payable per share) / Share price before the new share issuance}] / (Number of outstanding shares in issuance + Number of additional shares newly issued)

    The “number of outstanding shares in issuance” provided above in the formula is derived by deducting the total number of treasury stock that the Company owns from the total number of outstanding shares in issuance. In the event the Company decides to divest a part of its treasury stock, the “number of new shares issued” shall be replaced by the “number of treasury stock to be divested” and “share price before the new share issuance” with "share price before the divesture".

  • (c) The application of the adjustment formula for the exercise price shall be subject to the provisions set forth below in addition to (b) above.

    • (I)With regard to the adjustment of the exercise price derived from the above formula in (b) (collectively the “adjustment formula for the exercise price”), (i) in the event the Company decides to conduct a stock split or a stock consolidation, it shall apply the adjustment formula for the exercise price to the exercise price of the stock acquisition rights to be exercised on or after the following day after such event comes into effect and (ii) in the event the Company decides to issue new shares or divest its treasury stock (excluding any exercise of warrants or Stock Acquisition Rights and/or warrants attached to warrant bonds) at a price below the market price, it shall apply the adjustment formula for the exercise price to the exercise price of the Stock Acquisition Rights to be exercised on or after the following day of the payment date. However, if there is an allocation date for the allocation of shares, it shall apply the adjustment formula for the exercise price to the exercise price of the Stock Acquisition Rights to be exercised on or after the following day of such allocation date.

    • (II)“Exercise price before adjustment” shall represent the exercise price that is valid on the preceding day of the effective date, when the exercise price after adjustment defined by (I) above comes into force (the “effective date of the adjusted price”).

    • (III)“Number of outstanding shares in issuance” shall represent the number of shares obtained by deducting the number of treasury shares of the Company from the total number of outstanding shares of the Company that are valid 30 days prior to the effective date of the adjusted price. However, in the case of (I)(ii) above, where the effective date of the adjusted price is the day following the stock allocation date, it shall be the relevant allocation date. Furthermore, in cases where two or more events that have an impact on the adjustment of the exercise price happen board and board, and if the number of outstanding shares to be used in determining the exercise price after an adjustment can be calculated fairly and appropriately based on a specific event, then such number of outstanding shares shall be used.

    • (IV)“Share price before the new share issuance” shall represent the average value of the daily closing prices (including indicative prices) of common stocks of the Company quoted on the Tokyo Stock Exchange for 30 trade days (except for days without a closing price), starting from the 45th day prior to the effective date of the adjusted price. In calculating such average value, the figure shall be rounded off to the first decimal place.

    • (V)If the difference between the exercise price after adjustment, derived from the adjustment formula for the exercise price, and the exercise price before adjustment remains less than 1 yen, no adjustment of the exercise price shall come into effect. However, in cases where the exercise price must be adjusted subsequently due to the occurrence of a certain event, instead of using the former exercise price before adjustment in the adjustment formula for the exercise price, a figure adjusted by adding or deleting such difference shall be used for the purpose of calculating the exercise price after adjustment.

(22) The aforementioned paragraphs become valid when the filings conducted under the Securities and Exchange Law takes effect.

3. Status of equity financing, etc., conducted in the past three years

(1) Status of equity financing

i Capital increase through public offering

Issue date December 30, 2003
Number of shares issued 14,500,000 shares
Issue price 3,358 yen
Amount of capital increase 48,680 million yen
Capital after the increase 162,303 million yen

ii Issuance of Euro Yen Convertible Bond due 2013

Total issue amount 50,000 million yen
Initial conversion price 6,498 yen
Payment date December 30, 2003

iii Issuance of Euro Yen Convertible Bond due 2014

Total issue amount 50,000 million yen
Initial conversion price 5,957 yen
Payment date December 30, 2003

iv Issuance of Euro Yen Convertible Bond due 2015

Total issue amount 50,000 million yen
Initial conversion price 5,488 yen
Payment date December 30, 2003

v Issuance of Stock Acquisition Rights by Third Party Allotment (The exercise period has closed on November 30, 2004.)

Class and number of shares to be issued upon exercise of Stock Acquisition Rights 8,000,000 shares of common stock of the Company (100 shares per each Stock Acquisition Right)
Total issue amount 1,660 million yen
Payment date June 22, 2004

(2) Share price, etc., performance for the past three years and thus far this fiscal year

  March 2002 March 2003 March 2004 March 2005
Opening price 4,700 yen 2,385 yen 1,360 yen 4,990 yen
High 5,670 yen 2,485 yen 7,370 yen 5,760 yen
Low 1,542 yen 827 yen 1,261 yen 3,310 yen
Closing price 2,375 yen 1,380 yen 4,870 yen 5,160 yen
PE Multiple - - - -
[Notes]
  • *1Share prices for the fiscal year ending March 2005 are as of November 29, 2004.
  • *2PE multiples are derived by dividing the share price by the net income per share for the relevant period.
  • *3PE multiples for the years ended in March 2002 through 2004 are not provided as the Company reported a net loss for the years.

4. Stock Acquisition Rights issuance calendar (to be finalized)

November 30, 2004 Board resolution to issue Stock Acquisition Rights
File securities report
December 1, 2004 Public notice of the board resolution to issue Stock Acquisition Rights
December 8, 2004 Securities report filing takes effect
December 9, 2004 through December 15, 2004 Application period
December 16, 2004 Payment date

5. Outline of the third party to which allotment is to be made

Name of the third party Goldman Sachs International
Number of Stock Acquisition Rights to be allotted 80,000 units
Amount payable: 3,150,000,000 yen
Information pertaining to the third party Address Peterborough Court 133 Fleet Street London EC4A 2BB, United Kingdom
Name of representative Peter A Weinberg
Amount of capital US$ 145,693,000
Nature of business Securities Business
Major shareholder
  • Goldman Sachs Holdings (U.K.)
  • Goldman Sachs Group Holdings (U.K.)
Relationship with the Company Capital relationship
Number of the Company’s shares held by the third party
7,856,796.72 shares of common stock
Number of the third party’s shares held by the Company
None
Trading relationship N/A
Human relationship N/A
[Note]
  • *Major shareholder and Amount of capital are as of May 28, 2004. Capital relationship (including the number of residual securities in relation to option) is as of May 31, 2004.
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