SoftBank Group confirmed plans to reduce its 24% stake in T-Mobile US, first outlining an initial transaction worth an estimated $21 billion based on the US carrier's closing price on Monday.

The move forms part of the Japan-based group's efforts to fund a $41 billion share buyback and debt reduction plan. The deal had been anticipated because of SoftBank's current financial woes and will leave it with only a small share in T-Mobile US.

SoftBank said it will transfer up to 198.3 million shares in T-Mobile – valued at around $21 billion – to the US carrier itself, which will then sell the shares through a public offering in the US, a private placement, a rights offering, and a sale to SoftBank director Marcelo Claure. SoftBank has agreed to pay a fee of $300 million fee to T-Mobile US.

Deutsche Telekom will then receive a call option to buy more than 101 million shares in T-Mobile, worth around $10.8 billion, by June 22, 2024. The German group owns about 43% of "new" T-Mobile following the Sprint merger. (See T-Mobile, Sprint renegotiate deal to give Deutsche Telekom bigger stake.)

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If both transactions are completed, SoftBank would reduce the number of shares held in T-Mobile US from over 304.6 million to 4.8 million. According to Nikkei Asian Review, its stake would then be less than 0.4%.

SoftBank Group recently posted a dreadful set of financial figures for fiscal 2019 to end March 31 because of wayward "Vision Fund" investments, although SoftBank Corp., which provides mobile, fixed-line and e-commerce services, posted a fairly solid set of financial results for the same period. (See SoftBank's bleedin' (and Ma's not alright) and SoftBank's telco and e-commerce unit doing OK (pity about the parent company).)

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— Anne Morris, contributing editor, special to Light Reading