NEC to sell up to $1.5 bn in shares

TOKYO, JAPAN: NEC Corp, Japan's largest PC maker, plans to raise up to 150 billion yen ($1.7 billion) in a share offering to shore up its capital and invest in growth businesses, four sources familiar with the matter said.

The company will announce the share issue, its first in 6 years, as early as Friday, the sources said.

NEC spokesman Makoto Miyakawa declined to comment.

NEC, which cut its full-year operating profit outlook by 40 percent last week, is hurrying to shore up a capital base that has been weakened by losses at semiconductor unit NEC Electronics and sluggish sales of its network systems.

NEC reported a net loss of about $3 billion in the past financial year ended in March, driving its shareholders' equity ratio to just under 21 percent and roughly half that of peers Sharp Corp and Panasonic Corp.

Issuing 150 billion yen worth of stock at Thursday's closing price of 248 yen would boost the number of NEC's shares outstanding by 30 percent.

NEC, which competes with Fujitsu Ltd in telecom and IT services equipment, would use some of the funds raised to invest more in growth areas such as in lithium-ion batteries for next-generation cars and in cloud computing, the sources said.

NEC will be joining a rush of firms tapping resurgent equity markets for funds. Japanese companies have sold $38 billion worth of shares so far this year, an almost five-fold increase from $8.7 billion a year earlier, according to Thomson Reuters data.

Shares of NEC, which has a battery joint venture with automaker Nissan Motor Co, hit an eight-month low on Thursday, having shed 60 percent since a peak in June.