Sony takes out ¥80 billion loan as PS3 production ramps up
Sony Corp. has taken out an 80 billion Yen (545 million Euro) three-year floating-rate bank loan - marking the first time the company has borrowed funds in ten years.
Sony Corp. has taken out an 80 billion Yen (545 million Euro) three-year floating-rate bank loan - marking the first time the company has borrowed funds in ten years.
According to Bloomberg.com, more than 20 Japanese lenders will contribute to the loan, which will be used to "diversify funding sources."
The report suggests that Sony has "tapped the country's expanding syndicated loan market as it offered a cheaper source of cash at a time when investors in corporate debt are demanding higher yields before an expected rise in Japanese interest rates this year."
Sony spokesperson Shinichi Tobe told Bloomberg that the loan offers more flexibility than bonds, and that the company had ended up borrowing more funds than initially planned.
Fellow spokesperson Koji Kurata added that the funds will be used "for general purposes", according to Bloomberg. Sony intends to invest 460 billion Yen (3.13 billion Euro) in semi-conductor manufacturing and 100 billion Yen (68 million Euro) in an initiative to develop liquid-crystal displays with Samsung.
Sony is also facing costs associated with the manufacture of the PlayStation 3 and the launch of the new Blu-Ray disc format - both of which are due to roll out this year. Last year the company embarked on a three-year cost-cutting exercise that will see the loss of 10,000 jobs.