British semiconductor designer Arm Holdings must formally file an IPO in the US by the end of September if its owner SoftBank wants to avoid an US$8.5bn (£6.8bn) debt deadline, The Telegraph today reported.
Japanese conglomerate SoftBank initially planned to list in March, but turmoil in the financial sector put what will likely be one of 2023’s biggest IPOs on the back burner.
Under the terms of loans taken out by SoftBank with Arm stock as collateral, Arm would become liable for the 10-figure debt under a ‘springing guarantee’ that “becomes effective on the triggering of material breach or misrepresentation, an IPO not occurring within 18 months of 31 March 2022”, per accounts seen by The Telegraph.
The debt is due to be repaid three months after Arm’s listing date, though SoftBank could choose to repay earlier or potentially renegotiate the debt.
SoftBank bought Arm for £24bn in a take-private deal in 2016 and is now seeking a valuation on the New York Stock Exchange for more than double that figure.
It was a massive blow for London’s capital markets when the Japanese conglomerate opted for a New York listing over Arm’s home ground, but there is no doubt that tech-savvy US investors will place a significantly higher valuation over London’s own.
SoftBank chief Masayoshi Son reportedly signed off on a Nasdaq listing this week.