Pioneer Corp, once among the world’s hottest names in technology before succumbing to debt and failed expansions, agreed to a bailout from Baring Private Equity.
Baring Private Equity is to buy as much as ￥60 billion (US$538.32 million) of stock in the Tokyo-based company, according to a filing made yesterday.
However, its shares fell 9.3 percent to their lowest level in nine years after the company said the deal was not legally binding, although executives told reporters that they hope to clinch an agreement by next month.
Pioneer became a household name in the 1980s with its home and car stereo systems, but has struggled for years after failed expansions into new markets left it saddled with debt.
Last month, it expressed uncertainty that it could continue as it heads toward a full-year operating loss.
The company is to get a ￥25 billion bridge loan to tide it over ahead of the share sale, and plans to remain publicly traded.
“Today is the first step toward a Pioneer reborn,” chief executive officer Koichi Moriya told a briefing in Tokyo. “We are working as one to clinch the official contract by the end of October and come up with a restructuring plan. In five to seven years we can be growing again.”
Pioneer helped change karaoke and home entertainment in the 1980s with laser discs, invested heavily in plasma televisions and introduced the world’s first commercial OLED display for a car stereo in 1999, but was unable to build a sustainable market in those sectors and was caught out by changes in technology.
Pioneer now has total debt of ￥50.3 billion, according to data compiled by Bloomberg.
It has focused on car navigation and visualization systems as it seeks to break into the autonomous car market.
“Self-driving needs maps and we want to be the first in the world to come up with a business model based on our map technology,” Moriya said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS