NEC Corp, Japan's biggest maker of telecommunications equipment, may sell new shares to boost capital, the company's new president said.
The sale would be one option, but not necessarily the most desirable method, the company has at its disposal, Akinobu Kanasugi said after a press conference in Tokyo, his first since becoming president of NEC.
NEC wants to strengthen its capital, which was eroded by a record loss last fiscal year and a charge associated with a change in the regulation of pension funds, Kanasugi told reporters at the news conference. NEC's capital adequacy ratio, a measure of how little a company relies on borrowed money, was 14 percent as of Dec. 31, compared with 20 percent as of March 2001.
The option more favored by NEC to raise capital would be to double operating profit to about ?200 billion (US$1.7 billion) in the fiscal year starting April 1, Kanasugi said. Kanasugi declined to disclose a capital adequacy ratio target for NEC or when the company may sell new shares.
"We got to show investors that we can double operating profit before selling new shares to them," Kanasugi said.
Kanasugi cites rising sales of mobile phones in China and Europe and computer-system services as boosting profit.
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