Nippon Columbia Co., a troubled audiovisual equipment maker and music producer, said it will seek rehabilitation under the wing of U.S. investment firm Ripplewood Holdings LLC and split into separate companies.
Nippon Columbia said Wednesday it will allocate 4.14 billion yen worth of new common shares to Hitachi Ltd., its biggest shareholder, in July and 6 billion yen in new preferred shares to Hitachi and a holding company to be established by Ripplewood in October.
Ripplewood will accept more than 83 percent of the new preferred shares, acquiring a 41.7 percent stake in Nippon Columbia and replacing Hitachi as the biggest stockholder.
Nippon Columbia's Denon division, which produces audiovisual equipment, will be spun off in October, and Ripplewood will acquire a 98 percent stake in the new company through the holding firm, while the remaining 2 percent will be held by Hitachi.
Nippon Columbia will then concentrate on its music business.
Nippon Columbia expects to incur a consolidated net loss for the 10th consecutive year due to a lack of popular songs and poor sales of its audiovisual equipment.