Bond move sends Sony shares to 30-year low

Written By Unknown on Kamis, 15 November 2012 | 17.52

SONY shares dived to three-decade lows in Tokyo on Thursday after the troubled Japanese electronics maker announced a $1.9 billion bond issue that stoked dilution fears among investors.

The stock closed down 8.85 per cent at Y793 on the Tokyo Stock Exchange, after falling more than 11 per cent in early trading to levels last seen around 1980 and the era of the Walkman.

The firm said late on Wednesday it would issue convertible bonds totalling Y150 billion ($A1.81 billion) yen ($1.9 billion) to raise funds for business investment and repay debts, sparking fears that debt converted into Sony stock would dilute the value of its existing shares.

Thursday's session was also a long way from the stock's level just shy of 17,000 yen in 2000, the year Sony's PlayStation 2 game console 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.

"The 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 that 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 $US100 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 televisions 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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