SoftBank to Get Majority Stake in Katerra With $200 Million Bailout – The Wall Street Journal
SoftBank Group Corp. has agreed to invest $200 million more to bail out Katerra, a construction startup that ran into financial problems as it tried to shake up the building industry.
Katerra’s shareholders on Wednesday voted to approve the new investment on top of the roughly $2 billion SoftBank has already invested. Under the plan, the Japanese investment firm’s stake in Katerra will grow to give it a majority stake, while other investors will see their stakes severely diluted, according to people familiar with the matter.
SoftBank’s new investment will enable Katerra to avoid having to seek bankruptcy protection, according to Katerra’s chief executive, Paal Kibsgaard. The company needed SoftBank’s latest investment “to continue as a going concern,” he said in a notice to shareholders about Wednesday’s meeting.
As part of the funding package, SoftBank-backed financial-services firm Greensill Capital agreed to cancel around $435 million in debt owed by Katerra in exchange for a roughly 5% stake in the company, Mr. Kibsgaard said in an interview Wednesday.
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