Mitsubishi Chemical Corp. will invest around ¥1 billion to ¥2 billion in struggling electronics maker Pioneer Corp. through a third-party allocation of new shares as early as at the end of March to help turn around the electronics firm’s business, sources said Wednesday.
Under a planned business tieup between Pioneer and Mitsubishi Chemical, the two will jointly develop organic electroluminescent lighting equipment, which they see as the next-generation in energy-saving lighting, the sources said.
The latest deal aims to boost the financial base of Pioneer, which is also planning a third-party allotment of new shares worth ¥2.5 billion to Honda Motor Co., as well as a public stock offering worth ¥20 billion by the end of March, according to the sources.
Mitsubishi Chemical, a unit of Mitsubishi Chemical Holdings Corp., intends to make use of Pioneer’s technology in organic electroluminescent displays for commercial use in the next few years, the sources said.
OELDs can be used in television screens, computer monitors and tiny devices like cell phone displays. OELDs have an advantage over traditional liquid crystal displays because they don’t require a backlight to function, thus saving on power consumption.
Pioneer posted a group net loss of ¥130.53 billion for fiscal 2008, which ended last March, remaining in the red for the fifth consecutive year, partly due to languishing demand for plasma display televisions.
As part of its restructuring efforts, Pioneer has withdrawn from its plasma display television business and agreed with its top shareholder, Sharp Corp., to integrate their optical disc operations.
Pioneer initially planned to boost its capital by raising around ¥40 billion through such measures as tapping public funds, but the firm halved the fundraising amount after an upturn in earnings.
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