Japan's NEC sells stake in China's Lenovo
TOKYO - Japanese information technology firm NEC is selling its 2.7 percent stake in Chinese personal computer giant Lenovo, worth about $230 million, an NEC spokesman said Wednesday.
"The sale is part of our efforts to effectively use our assets and strengthen our financial base," the spokesman said.
But NEC would maintain a partnership with Lenovo in the personal computer businesses, including joint venture Lenovo NEC Holdings launched last year, the spokesman added.
The sale comes after NEC booked a 110.3 billion yen net loss ($1.4 billion) in the fiscal year to March with asset write-downs and tax payments hitting its bottom line, even as operating profits rose.
Japan's technology companies have struggled under pressure from the stubbornly strong yen, global competition, increasing material costs and falling prices.
In January NEC said it planned to axe 10,000 jobs, or about 9.0 percent of its global workforce.
"They've recently done downsizing," a senior strategist at a Japanese brokerage told Dow Jones Newswires.
"They may need some cash to pay for that."
NEC shares closed 2.63 percent lower at 111 yen in Tokyo on Wednesday.
Lenovo's Hong Kong-listed shares were 6.8 percent lower at HK$6.17 (80 cents) in afternoon trade.
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