NEC sets $1.7b share sale price
TOKYO, Japan (Reuters) -- Electronics maker NEC has set a 711-yen per share price for its upcoming stock issuance that could net the firm up to $1.72 billion in Japan's largest public offering this year.
The price represents a 2.06 percent discount to Monday's closing price of 726 yen in Tokyo.
Last month the chips-to-computers conglomerate announced plans to issue 250 million new shares -- equivalent to 15.1 percent of its existing shares -- to repair its battered balance sheet and for capital spending.
NEC said in a statement that the offering would net it a maximum of about 185 billion yen ($1.72 billion) after fees and including another 23 million shares under a greenshoe option that would bring the total issuance to 273 million shares.
NEC's stock has fallen eight percent since November 21 when the company first announced the share issuance, hurt by dilution concerns and speculation that some potential investors were selling the stock to knock down the acquisition price.
The company's shareholder equity ratio, an indicator of financial health, remains below 10 percent, compared with nearly 20 percent a decade ago, due in part to the lingering effects of record losses in 2001/02 and an underfunded pension plan.
NEC said it planned to use 40 billion yen of the new funds for capital expenditure, 90 billion yen for new investments and the rest for paying back debt.
The company said that 131 million of the 250 million share offering will be offered to foreign investors. Managers of the deal include Daiwa Securities SMBC and Morgan Stanley.
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