May 25, 1999
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| May 25, 1999 | atimes.com | |
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| Japan Economy Softbank plans October shift to holding company system TOKYO - Softbank Corp. (TSE:9984) will become a holding company on Oct. 1, the first nonfinancial firm to do so, company officials said. The firm, whose net profit leapt by 260 percent in the last fiscal year, intends to use the new structure to expand group operations while emphasizing profitability and cash flow. As part of the process, the company will hand over its software and personal computer wholesaling operations on Oct. 1 to a wholly owned subsidiary it sets up the previous month.Softbank spun off its publishing, finance and administrative operations into 100 percent-owned units in April. As a pure holding company, Softbank will confine itself to making decisions on large-scale investments and group strategy. Operating revenue will come in the form of dividends from subsidiaries and interest on loans to group members. Wholesaling, finance and publishing subsidiaries will act as holding companies for a total of about 100 affiliated firms. More than half of the directors of the holding company and primary subsidiaries will come from outside the group. Each subsidiary will have authority over its own personnel and salary decisions, the officials said. Softbank saw its consolidated net profit soar 260 percent to 37.5 billion yen ($303.2 million) in the business year ended March, the company announced Wednesday. The sharp increase was attributed mainly to the 46.6 billion yen it earned from the sale of part of its stake in U.S. Internet firm Yahoo Inc. The Tokyo-based computer software distributor and magazine publisher, however, posted a group pretax loss of 15.4 billion yen, compared with a profit of 24.3 billion yen a year earlier. The loss stemmed mainly from the poor performance of U.S. subsidiary Ziff-Davis Inc. The group's media business posted an operating loss due to falling ad revenues in the Japanese publishing division and restructuring-related spending by Ziff-Davis. Exhibition and other service operations also recorded a smaller operating profit. The Yahoo shares were sold in February to raise funds for investment in Internet-related companies. The Softbank group is estimated to have 1.9 trillion yen in unrealized profit on stockholdings in listed companies.''Our group will raise 10-15 billion yen a year from stock sales to redeem bonds,'' Softbank President Masayoshi Son said. (Asia Pulse/Nikkei) | |||||||||
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