Sony will tap capital markets to raise more than $1 billion in fresh funds for investment and bond redemption next month as the struggling electronics maker grapples with a slide in global consumer spending that’s pushing it to its first net loss in 14 years. Sony plans to offer Y100 billion of corporate bonds via three-, five- and 10-year tranches in early June, a person close to the deal said Tuesday according to WSJ. Nomura Securities, Nikko Citigroup, Mitsubishi UFJ Securities and Mizuho Securities will jointly lead manage the deal, the person said. A Sony spokesman said the company has decided to issue corporate bonds to raise funds for investment and to repay part of an existing bond issue that’s set to mature in March 2010. He declined to provide further details.
Sony is expected report it swung deep into a net loss for its fiscal year ended March when its releases results Thursday. It has already announced plans to cut as many as 16,000 jobs from its global work force in an effort to trim billions of dollars from its cost base. The company has forecast a net loss of Y150 billion for the 12 months ended March. While Sony Tuesday declined to comment on where it might invest some of the money it raises, analysts say it’s likely that the unprofitable Sony Ericsson mobile phone business may need fresh capital before long as it tries to target new customers in markets like the U.S., China and India.
Like much of Japan’s export-dependent technology industry, Sony has seen the value of its exports undercut by the recent strength of the yen versus currencies like the dollar and the euro. It’s also been hit by recession in major markets for its TVs, digital cameras and mobile phones as increasingly budget-conscious shoppers curtail spending plans. In an effort to speed up attempts to revive the company’s fortunes, Chief Executive Howard Stringer is taking fuller control of the company, adding the title of president and appointing younger executives to key management positions.
Information courtesy Wall Street Journal.
