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MENAFN - AFP - 14/11/2012

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(MENAFN - AFP) Shares in Sony dived more than 10 percent to lows not seen since 1980 after the troubled Japanese electronics maker announced it would issue bonds worth 150 billion yen (1.9 billion).

Sony was down 10.91 percent at 775 yen in morning trade on the Tokyo Stock Exchange after falling to a low of 772 yen, down 11.26 percent from Wednesday.

The firm said late Wednesday it would issue convertible bonds totalling 150 billion yen to raise funds for business investment and to repay debts, sparking fears of dilution of the value of each share.

The price was less than five percent of the peak price of 16,950 yen in 2000, the year PlayStation 2 was released.

"This is likely a one-off trade following the CB (convertible bonds) announcement," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"Focus is on whether the firm can achieve synergy effects through the tie-up with Olympus," he told Dow Jones Newswires.

Sony has joined hands with the camera and endoscopes maker which had looked for business partners as it tries to move on from an embarrassing accounting scandal.

In September, Sony said it would invest 50 billion yen in Olympus, citing its desire to tap the lucrative medical equipment business as its television unit struggles.

Olympus said Monday it had swung back into the black in the first half of its fiscal year, reporting a 100 million net profit on the sale of subsidiaries unrelated to its core business, while the key medical systems unit posted an operating profit.

Sony and its domestic rivals are all struggling due to the strong yen and falling prices of television and other products amid stiff competition from South Korean, Chinese and other makers.

Moody's last week downgraded Sony's credit rating for the second time in a month, the latest blow to Japan's electronics sector where embattled Sharp has seen its own credit rating slashed to junk.

The global ratings agency chopped Sony by one notch to Baa3 with a negative outlook, just above junk grade.


 






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