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SoftBank sounds out Japan's top banks on $2.8 billion loan, sources say

SoftBank sounds out Japan's top banks on $2.8 billion loan, sources say
FILE PHOTO: The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo, Japan, July 20, 2017. REUTERS/Issei Kato -
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Issei Kato(Reuters)
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TOKYO (Reuters) – SoftBank Group Corp <9984.T> is sounding out Japan’s top three banks to borrow around 300 billion yen (2.17 billion pounds) to help fund its support of U.S. startup WeWork, three people familiar with the matter said on Thursday.

While official talks haven’t started yet, SoftBank has approached its main bank Mizuho Financial Group Inc <8411.T>, as well as Mitsubishi UFJ Financial Group Inc <8306.T> and Sumitomo Mitsui Financial Group Inc <8316.T>, the sources said.

All three sources declined to be identified because they were not authorised to speak on the record.

A SoftBank spokeswoman said that a loan was one of its options but nothing had been decided yet. All three banks declined to comment.

SoftBank agreed in October to offer a $9.5 billion lifeline to take control of WeWork.

SoftBank has provided Japanese banks with a rare profit opportunity at home, where they are largely hamstrung by ultra-low interest rates. But Japan’s top three lenders have also become more cautious about financing the conglomerate, bankers say, given the turmoil over WeWork.

“We have to be very careful about this,” one of the sources said. “Especially if the money goes to WeWork, it will take a long time to conclude the process.”

SoftBank fell earlier this month to its first quarterly loss in 14 years, dragged down by an $8.9 billion hit at its giant Vision Fund, as CEO Masayoshi Son admitted poor investment judgment and turning a blind eye to problems at startup WeWork.

The potential bank loan was first reported by the Nikkei.

(Reporting by Takashi Umekawa; Editing by David Dolan & Kim Coghill)

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