Business
The unprofitable maker of vacuum cleaners and nuclear reactors sold 1.09 billion shares at 230 yen each, or 3.4 percent less than todays closing price, Tokyo-based Hitachi said in a statement. The company had planned to sell the stock at a discount of 3 percent to 5 percent, according to an e-mail sent to investors by one of arrangers last month. Hitachi also sold 100 billion yen of bonds convertible into stock.
The company joins NEC Corp. and Toshiba Corp. among Japanese manufacturers selling stock this year to replenish capital lost following the global recession. Hitachi, facing a fourth straight annual loss, may need to sell more shares, dispose of some businesses or post profits to meet its goal of raising its shareholders equity to 20 percent of assets.
“They will need more money going forward,” Hideyuki Suzuki, a Tokyo-based analyst at SBI Securities Co., said before the announcement. “The company has latent potential, but has been plagued by management problems and an inability to realize this potential since before the financial crisis.”
Hitachi fell 3.3 percent to close at 238 yen in Tokyo trading today, compared with a 1.5 percent gain in the benchmark Nikkei 225 Stock Average. The stock has fallen 19 percent since last months share-sale announcement on concern the offering will dilute the value of investors existing holdings.
Growth Businesses
Nomura Holdings Inc. and Goldman Sachs Group Inc. are arranging the sale.
The company plans to use the proceeds to invest in growth businesses and repay debt, Hitachi said last month. Its forecasting a 230 billion yen net loss for the year ending March 31. The company last year posted a record 787.3 billion yen loss.
Efforts to cut costs and procurement expenses, as well as structural reforms in businesses such as digital media, showed positive results in the second quarter, Hitachi said last month. Stimulus measures around the world helped demand from China and emerging markets recover, the company said in the statement at the time.
In July, Hitachi offered to buy out five publicly traded subsidiaries and affiliates for 282.2 billion yen to help speed up business decisions and reduce overlapping costs.
Japan Stock Sales
Hitachi aims to spend about 100 billion yen for facilities at its Power & Industrial Systems unit to boost production, the company said last month. It also plans to invest 90 billion yen for the Information & Telecommunication unit, it said.