Sony plans $2.9bn IPO of insurance unit

Tokyo-based Sony Corporation is planning an initial public offering (IPO) of about 332 billion yen ($2.9 billion) of its insurance unit in Japan's biggest sale this year, according to a report on the website of Bloomberg.

The report added that the funds would help Sony improve profitability at its consumer electronics and games divisions.

The company will sell 7,25,000 shares, or 34.5% of Sony Financial Holdings Inc, and the unit will offer 75,000 new shares, according to a filing sent to the Ministry of Finance today. The stock is expected to be priced at about 415,000 yen with the final price to be set on October 1.

"The funds may help Sony, the world's second-largest consumer electronics maker, expand production of flat panels as the company expects to double profit this year on demand for its Bravia televisions and CyberShot cameras. Tokyo-based Sony, whose PlayStation 3 is outsold more than two-to-one by Nintendo's Wii in the US, may also use the cash to fund price cuts to spur demand for its game console," the report said.

Sony Financial, established in April 2004, comprises Sony Life Insurance Comopany, automobile insurer Sony Assurance Inc, and online bank Sony Bank Inc, the report added.