Page last updated at 11:48 GMT, Monday, 26 November 2007

Dubai-run fund buys Sony shares

Employee in Japanese shop holding Playstation 3 console
Sony is struggling to compete in the next generation console market

An investment firm owned by the government of Dubai has said it has bought a "substantial stake" in Sony.

Dubai International Capital would not disclose the value of the investment, but if it is larger than 5% it will have to be reported to regulators.

A 3% stake would cost about $1.5bn (724m) at Sony's current share price.

It marks the first time the Dubai fund has invested in Japan and reflects a wider trend of oil-rich Gulf states looking to diversify their wealth.

After the announcement, Sony shares climbed 4.6% to 5,500 yen ($50.7; 24.4), ahead of the country's blue chip benchmark index, which ended 1.7% higher at 15,135.21.

"While the restructuring process at Sony is well advanced, the recent successful listing of Sony Financial Holding is evidence of management's ongoing strategy of focusing on capital efficiency and cash generation," Dubai International Capital said.

Sony is in the process of spinning off bits of its business that it does not consider core to its future as a consumer electronics manufacturer.

Playstation 3 woes

Sony is in the final year of a three-year turnaround plan led by its chief executive Howard Stringer.

In its last quarter, the electronics giant swung to an operating profit from an operating loss in the previous year, despite widening losses in its division which manufacturers its Playstation 3 console.

Sony slashed the price of the firm's next generation games hardware in the US to better compete with rivals Microsoft's Xbox 360 and Nintendo's Wii.

But this has meant that in some cases production costs are now higher than the machine's price tag.


SEE ALSO
Qatar 'eyes Nasdaq's LSE stake'
02 Sep 07 |  Business
The Gulf stream into London
21 Sep 07 |  Business
No price cut for Euro PS3 console
13 Jul 07 |  Technology
Wii outselling PS3 'six to one'
03 Jul 07 |  Technology
Sony cuts Playstation price in US
09 Jul 07 |  Business
Sony up despite Playstation woes
26 Jul 07 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC iD

Sign in

BBC navigation

Copyright © 2020 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific