Sony Corporation plans to raise nearly $4 billion via new shares and bonds to plough into image sensors as it reinvents itself as a niche component maker, pulling back from consumer goods that dragged it into losses.

In its first new-share issue in 26 years, the Japanese firm said yesterday it expects to raise ¥321 billion (€2.35 billion) from a public stock offering after a rally that has seen its market value double in a year. It will raise a further ¥119 billion from a convertible bond issue to fund a boost in sensor output capacity at its advanced plants in Japan.

The share issue, worth close to a tenth of its current market value, provides the clearest signal yet that chief executive Kazuo Hirai is prioritising the sensor business to anchor Sony’s turnaround. The firm has long been plagued by losses in branded consumer goods, hit by fierce competition both from cheaper rivals in Asia and industry giants such as Apple and Samsung Electronics.

The image sensors, a key high-tech component in digital cameras and smartphones, have emerged as one of Sony’s strongest lines, alongside its PlayStation videogames unit, helping the company recover from a long slide in TV and smartphone sales.

Sony is only just emerging from decline, booking a net loss of ¥126 billion in its latest fiscal year, although it expects a profit of ¥140 billion in the current year.

The move caught investors by surprise yesterday, with fears the new stock will dilute per-share earnings sending the stock 8.3 per cent lower at the close. Yet the company’s market value has climbed in step with its recent recovery and has more than doubled since June 2014 to close to $35 billion.

Takatoshi Itoshima, chief portfolio manager at Commons Asset Management, said the move was seen as more positive by longer-term investors but that short-term investors may question the strength of Sony’s balance sheet. – (Reuters)