What links Japan-listed conglomerate SoftBank’s $2.8bn investment for a 40% stake in Norway-based AutoStore with the potential reverse merger and flotation of southeast Asia superapp Grab?
Liquidity. SoftBank’s near-$100bn Vision Fund is one of the largest shareholders in Grab.
Grab will reportedly raise about $2.5bn through what is called a private investment in public equity as part of its reverse merger at a $35bn valuation with special purpose acquisition company, Altimeter Growth 1, the Financial Times reported.
SoftBank has encouraged all its portfolio companies to look to raise public money and list given the unprecedented liquidity.
This does two things. First, it limits cash calls on SoftBank to fund the portfolios’ later rounds.
Second, it gives an exit route to return capital to SoftBank to then invest in selected portfolio companies and new investments.
SoftBank had committed $10bn to its second Vision Fund, it said in its second-quarter earnings report in November.
The first Vision Fund raised $98bn with Saudi Arabia and UAE state funds committing a majority as effectively debt to leverage the equity supplied by SoftBank and others.
Delivering rapid exits pays the debt and interest to Saudi’s Public Investment Fund and Abu Dhabi’s Mubadala and frees up cash for SoftBank to then meet its Vision Funds’ capital calls or other investments from its balance sheet and related CVC vehicles.
The Brownian motion of dealmaking is speeding up as liquidity floods to all parts.
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