Chinese online giant Alibaba Group Holdings has agreed to buy US $2bn of Alibaba Group from one of its major investors, Softbank Group. The company has stated that it will fund the transaction with cash.

Alibaba released a statement today that said “Further to the US$2 billion share purchase, members of the Alibaba Partnership, acting collectively, will enter into an agreement with SoftBank Group to acquire an additional US$400m of Alibaba shares at the same price per share as the purchase by Alibaba Group.

“These transactions have been agreed in conjunction with SoftBank Group’s launch of US$5bn in principal amount of mandatory exchangeable trust securities (METS) that are exchangeable into Alibaba shares in three years.”

Softbank initially invested in Alibaba in 2000, and this is the organisation’s first sale of Alibaba shares. On the 31st March this year, Softbank Group held 32% of Alibaba Group’s outstanding shares. If all of the proposed transactions are completed, Softbank;s shareholding in Alibaba Group will be reduced to 28%.

Commenting on agreement, Jack Ma, Executive Chairman of Alibaba Group, said of the purchase, “Under the leadership of Masayoshi Son, SoftBank has been a highly valued, long-time partner of Alibaba for more than 16 years, and we look forward to continuing our strong partnership together.

“As SoftBank looks to strengthen its own balance sheet, Alibaba determined that it was the best use of our capital to re-invest in our own business through an efficient buyback of a large number of shares in our own company that is accretive to our stockholders.”

Reuters reported today that Softbank is looking to sell at least $7.9bn of shares in Alibaba Group Holding because it needs to cuts its debt amid concerns about losses at its US telecoms unit Sprint Corp.