NEC Corp would be receiving 130 billion yen or US$1.3 billion in financial support coming from creditors as well as proceeds from the sale of its mobile phone sales unit to Marubeni Corp.
The support comes in the form of subordinate loans from top Japanese banks such as the Development Bank of Japan Inc, Sumitomo Mitsui Banking Corp and three other financial institutions. According to a statement from the company, it would also sell off its shareholdings in NEC Mobiling Ltd to fellow Japanese firm Marubeni for the price of 40.8 billion yen.
NEC is conducting a reorganization of its operations to move the focus to corporate services and assets sales. The plan is to ultilize the loans to support its current financements and be used to make strategic investments. NEC, the maker of wireless base stations and manufacturer of the La Vie computers have cut 10,000 employees from its rosters. It also has sold off its stake in Lenovo Group Ltd.
The company confirmed that earnings would decline this year, as net income drops to 20 billion yen in the year ending March 2013. Last year, it earned 30.4 billion yen.
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