Sanyo to raise $2.5 bn by share sale

Nov 18 | Updated: Nov 19 2005, 07:34am hrs
Sanyo Electric Co, the worst performer on Japans Nikkei 225 stock average in the past two years, forecast a second year of record losses and said it will raise as much as 300 billion yen ($2.5 billion) by selling shares.

The electronics maker needs cash to pay for a three-year plan to cut 15% of the workforce, close factories and invest in environment-related business such as solar panels and batteries. The loss in the year ended March 31 will swell to 233 billion yen from 171.5 billion yen a year ago, the Osaka-based company said in a statement on Friday.

CEO Tomoyo Nonaka is paring a sprawling group founded on a bicycle light factory in 1947 after competition with Chinese manufacturers eroded earnings, causing a 39% slump in Sanyo shares in the past two years. Sanyo on Friday said it may spin off its semiconductor unit, seek an alliance in its television business and stop producing some flat-screen TVs.

The real challenge is whether they can pull out of mobile phones, household goods, and other unnecessary hardware businesses, said Yukie Suzuki Suga, who helps manage about $1 billion in Japanese equities at Pictet & Cie in Geneva. If Sanyo can push through its restructuring plans, its stock may be worth buying because of its expertise in energy technology.

Shares of Sanyo, the worlds biggest maker of rechargeable batteries, rose by 2.5% to 292 yen at the 3 pm Tokyo close. Sanyos Frankfurt-traded stock fell to 2.04 euros, the equivalent of 284 yen, as of 6:35 pm Japan time. The company may sell between 200 billion yen and 300 billion yen of new shares to Goldman Sachs Group Inc, Sumitomo Mitsui Financial Group Inc and Daiwa Securities SMBC Co and existing shareholders, according to Fridays statement.

Bloomberg

BPL to close Noida factory operations

Mumbai, Nov 18: In view of the proposed transfer of BPL Ltds colour television business to the joint venture company with Sanyo, it has decided to close operations at its Noida factory in Uttar Pradesh.
This closure is subject to necessary clearances, BPL informed the exchanges. The consumer durables major BPL and the Japanese consumer electronics giant Sanyo Electric Company had forged a jv last year.
PTI