- SoftBank Group Corp (OTC:SFTBY) (OTC:SFTBF)-owned Arm Ltd, looks to transfer shares in its China joint venture to a SoftBank special purpose vehicle to speed up its U.S. IPO, the Financial Times reports.
- SoftBank will hold 28% of Arm China after the transfer, Bloomberg reports. Arm will hold less than 20% of Arm China and treat it as an uncontrolled affiliate.
- Arm will continue receiving licensing revenues from Arm China but will not need to audit the company's financials.
- The move will help SoftBank founder Masayoshi Son push ahead with an IPO of the chip designer despite a long-running stand-off involving Allen Wu, the head of Arm China, who currently controls the joint venture.
- The British chip designer struggled to regain control of its China business for almost two years.
- Arm's failure to audit the unit's financials, which contributed about one-fifth of revenue in 2021, was the main obstacle to its IPO following the collapse of the Nvidia Corp (NASDAQ:NVDA) deal.
- SoftBank believes that it does not require approval from Wu and the Shenzhen government for the share transfer.
- The IPO will play a crucial role in freeing up capital for SoftBank after the global selloff of technology companies eroded its balance sheet.
