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SoftBank won't invest in Indonesia capital city project

Reuters - March 11, 2022

Tokyo – SoftBank Group Corp (9984.T) will not invest in Indonesia's project to relocate its capital city to Borneo island, a company spokesperson said on Friday.

"SoftBank is passing on the project but continues to invest in Indonesia through the Vision Fund's portfolio companies," the spokesperson told Reuters.

In January 2020, Indonesia's powerful coordinating minister for maritime affairs and investment, Luhut Pandjaitan, said SoftBank had offered up to $40 billion for the project. SoftBank said at the time no figure had been suggested.

Indonesian officials also raised with CEO Masayoshi Son SoftBank's possible backing for a bid to host the 2032 Olympics, Reuters reported in March of that year. Brisbane was eventually selected.

A spokesperson for Luhut did not immediately respond to Reuters. Bloomberg carried comment from the minister saying Son would no longer invest in the project.

In 2019 ride-hailing firm Grab said it would invest $2 billion into Indonesia over five years using capital from SoftBank to accelerate the digitalization of services such as healthcare and infrastructure.

Son has a history of enthusiasm for grand plans including Saudi Arabian schemes to build solar power plants and a futuristic city in the desert.

SoftBank was hit by collapse in portfolio valuations in the early days of the COVID-19 pandemic, forcing an asset sell-off, and more recently has been hit by a slide in listed tech stocks.

Group shares closed down 6% on Friday and are trading near two year lows, despite a 1 trillion yen ($8.6 billion) buyback launched in November.

[Reporting by Sam Nussey and Fransiska Nangoy Editing by Mark Potter.]

Source: https://www.reuters.com/markets/funds/softbank-wont-invest-indonesia-capital-city-project-2022-03-11