Sony to raise fund thru’ IPO
Thursday, 6 September 2007
TOKYO, Sept 5 (AFP): Sony Corporation said Tuesday it would list its financial arm next month in hopes of raising about US$3.0 billion to reinvest in the recovering group's core electronics business.
The initial public offering (IPO) will be one of the largest in recent years and the biggest of 2007 at the Tokyo Stock Exchange, which is the world's second largest bourse.
Sony's financial business accounts for less than eight per cent of the total revenue for the iconic Japanese company, whose interests range from PlayStation three video game consoles to liquid display televisions to movies and music.
Sony Financial Holdings-the holding firm of Sony Life Insurance, Sony Assurance and Sony Bank-said it will sell 75,000 newly issued shares.
Sony Financial's other 725,000 shares will go on sale in Japan and on overseas markets, mainly in Europe and the United States, the parent company said in a statement.
Sony expected each share to sell for 415,000 yen, meaning the total sale would be worth 332 billion yen ($2.87 billion). Sony Financial said it would invest the revenue in key subsidiaries.
Analysts expect the listing to generate needed cash for Sony, whose PlayStation 3 has trailed rival Nintendo's Wii in sales and which is in the midst of a painful restructuring drive.
Koya Tabata, a Sony watcher at Credit Suisse in Tokyo, said the decision to leave the financial business, which has high growth potential, showed the company is in need of cash.
"Sony is pulling investment from an area that is projected to grow further and so is trying to balance out its business as a whole," Tabata said.
"Overall, I think that Sony is on track to redress itself and this will contribute towards that."
Sony, which is most famous for creating the Walkman, has pledged to devote more resources to innovation after years of lagging behind as rival Apple raced ahead with the iPod.
The initial public offering (IPO) will be one of the largest in recent years and the biggest of 2007 at the Tokyo Stock Exchange, which is the world's second largest bourse.
Sony's financial business accounts for less than eight per cent of the total revenue for the iconic Japanese company, whose interests range from PlayStation three video game consoles to liquid display televisions to movies and music.
Sony Financial Holdings-the holding firm of Sony Life Insurance, Sony Assurance and Sony Bank-said it will sell 75,000 newly issued shares.
Sony Financial's other 725,000 shares will go on sale in Japan and on overseas markets, mainly in Europe and the United States, the parent company said in a statement.
Sony expected each share to sell for 415,000 yen, meaning the total sale would be worth 332 billion yen ($2.87 billion). Sony Financial said it would invest the revenue in key subsidiaries.
Analysts expect the listing to generate needed cash for Sony, whose PlayStation 3 has trailed rival Nintendo's Wii in sales and which is in the midst of a painful restructuring drive.
Koya Tabata, a Sony watcher at Credit Suisse in Tokyo, said the decision to leave the financial business, which has high growth potential, showed the company is in need of cash.
"Sony is pulling investment from an area that is projected to grow further and so is trying to balance out its business as a whole," Tabata said.
"Overall, I think that Sony is on track to redress itself and this will contribute towards that."
Sony, which is most famous for creating the Walkman, has pledged to devote more resources to innovation after years of lagging behind as rival Apple raced ahead with the iPod.