Sony Corp shared plans early on Tuesday to raise $3.6 billion (440 billion Yen) through the issuance of new shares, all a part of its ongoing Mid-Term Corporate Strategy.
The overseas stock market did not react favorably to the news, as share prices plunged more than seven percent following the announcement. (See the chart posted below.)
“The purpose of this fund raising is to secure funds to invest in growth and to strengthen Sony Corporation’s financial base,” the company said in a Tuesday filing. “Sony Corporation believes that investment in growth, as well as strengthening its financial base through this fund raising, will contribute to further enhancement of Sony Corporation’s profitability.”
Sony is set to issue 87.2 million shares of
Sony plans to use the money from the issuance of new shares to increase its production capacity of stacked CMOS censors in its Devices segment, which it hopes will lead to additional profits. Further, the company wants to use the funds raised by the convertible bonds portion against capital expenditures for the segment and the repayment of debts.
Specifically, Sony aims to use about 188 billion Yen from the
As of May 31, Sony Corp had about 1.170 billion shares outstanding. At the end of this fund-raising period, the company will have approximately 1.262 billion shares outstanding.
Since the stock plunged after hours, SNE has rallied a little bit. The fall is perhaps most easily seen when plotted on a one-month chart, such as the below: