Sony plunges 8.25% on massive share sale plan

Sony plunges 8.25% on massive share sale plan

Tokyo (AFP) - Shares in Sony plunged 8.25 percent Tuesday on dilution fears after the Japanese electronics giant announced plans to raise $3.6 billion through stock and bond sales.

The stock closed at 3,461.5 yen on the Tokyo Stock Exchange, down 8.25 percent from the previous day, while the benchmark index ended up 0.63 percent.

Sony plans to raise a total of 441 billion yen ($3.6 billion) -- more than 10 percent of the company's market capitalisation as of Tuesday. It is the first new share issuance in 26 years, the company said.

Of the 441 billion yen, 321.5 billion yen will be procured though new issuance and a secondary offering of shares.

The company plans to raise another 119.9 billion yen in bonds that can be converted into stocks.

The financing is for image sensors for cameras and the shares will be offered in Japan and overseas, the company said.

"As financing this size is unusual, it's only natural that the stock fell in accordance with an expected dilution" of per-share value, said Hirokazu Kabeya, senior strategist at Daiwa Securities.

The announcement came with players unsettled by events in Europe, where Greece is lurching towards a default on its debt.

"The timing wasn't good as the market was already roiled over the Greek problem," he told AFP.