Payment of 1.08 trillion won ($935 million) will be made by Samsung in cash to the Sony corp. by selling for its stake in S-LCD Corp.
The world’s No. 3 TV maker Sony corp. has been fetching 175 billion yen loss in the year to March reportedly.
Today, a fresh report has been made by the Suwon, South Korea-based company, he said that Sony Corp. sold its stake in the venture with Samsung Electronics Co. to make liquid-crystal displays to the South Korean company after predicting an eighth consecutive year of losses from TVs amid sluggish demand.
This deal has been made today after the stock market closed for trading at that time, share value of Sony gained and Samsung share value had declined. Stake selling decision has been taken by Sony Chief Executive Officer Howard Stringer, 69, for covering the responsibility of panel manufacturing amid losses in the TV business.
Sony said in the statement, “Despite this one-time loss, Sony estimates that the transaction will result in substantial savings starting January,”
While Samsung and Sony had also decided to venture agreement for supply and purchase of LCD panels that will help Sony to make possible of having secure supply of LCD panels from Samsung, based on market prices, and without the responsibility and costs of operating a manufacturing facility.
Where estimates are made that Sony has been facing the fourth consecutive annual loss this year, on the other side announcement has been made by Stringer regarding the investment of $8.4 billion of acquisitions in 2011 to bolster the profitable phones and music divisions and introduced tablet computers to challenge Apple Inc.’s iPad.
Shiro Mikoshiba, an analyst at Nomura Holdings Inc. in Tokyo, informed Media, “Canceling out the venture enables Sony to become more flexible in procuring panels. Still, Sony continues to face falling prices and heavy fixed costs.”
“It’s a step forward for Sony,” he added.
