Sony said Friday it was selling its US headquarters in Manhattan for
$1.1 billion as part of an overhaul aimed at rescuing the Japanese
consumer electronics giant's tattered balance sheet.
commercial property firm Chetrit Group was leading a consortium that
agreed to buy the Madison Avenue building in a deal expected to close in
March, Sony said.
"Sony is undertaking a range of initiatives to
strengthen its financial foundation and business competitiveness and for
future growth," it said in a statement announcing the sale.
the same time, Sony is balancing cash inflows and outflows while working
to improve its cash flow by carefully selecting investments, selling
assets and strengthening control of working capital such as inventory.
This sale is made as a part of such initiatives."
The deal would
net Sony about $770 million after paying off building-related debt and
transaction costs, it said, adding that businesses including its movie
and music divisions would remain in the tower for up to three years
under a lease agreement with the buyer.
The 37-story building on one of New York City's best-known thoroughfares opened in 1984 and was sold to Sony in 2002.
was "re-evaluating" its outlook which forecasts a 20 billion yen ($223
million) annual net profit in the fiscal year ended March "to take into
account this sale and other factors that might affect such forecast".
maker of PlayStation game consoles and Bravia televisions lost a
whopping 456.66 billion yen in its previous fiscal year, the fourth in a
row, with its massive restructuring including selling off its chemical
division while investing 50 billion yen in camera and medical equipment
Last year, the firm said it would cut about 10,000
jobs and spend nearly $1.0 billion on a massive corporate overhaul
designed to shake up its product line and cut costs, which new chief
Kazuo Hirai described as "urgent".
The sale comes as Japanese
media reported this month that the embattled firm was also planning to
sell one of its main buildings in Tokyo's Osaki district, which
accommodates Sony's struggling television division.
hard times saw its its stock value tumble below 1,000 yen a share in
June, for the first time since the era of the Walkman.
were up 6.73 percent at 1,093 yen on Friday morning in Tokyo, after
jumping 5.67 percent the day before after Goldman Sachs upped its
recommendation on the stock to neutral from sell.
electronics sector including giants Sony, Panasonic and Sharp has
suffered from myriad problems including a high yen, slowing demand in
key export markets, fierce overseas competition and strategic mistakes
that left its finances in ruins.
The industry has been awash in
huge losses and credit rating downgrades, with rival Sharp saying last
year it would put up real estate as collateral for bank loans including
its Osaka headquarters to stay afloat.
Sony at CES 2013