updated 05:10 am EST, Fri January 18, 2013
Sony sale of New York HQ expected to generate $770 million in cash
Sony has sold off its US headquarters in New York for $1.1 billion, reports Bloomberg. The move is expected to generate around $770 million for the struggling Japanese tech giant and will help to stabilize its finances. Sony says that it will continue as tenants of the building for the next three years as part of the deal it brokered with the Chetrit Group.
The sale echoes the strategy employed by the similarly embattled tech giant Nokia, which recently sold its Espoo, Finland headquarters in order to help generate cash flow. Sony is in a slightly better position than Nokia, however, expecting to return to profit for the financial year ending March 31. It expects to return its first profit in several quarters generating a net income of $223 million. The sale of its New York HQ will also be factored into its results and has resulted in the biggest surge in its stocks in four years.
The sale of the company headquarters is part of new Sony CEO Kaz Hirai’s ‘One Sony’ corporate plan that has included the shedding of non-core divisions, which resulted in 10,000 job losses. The dramatic restructure was considered a necessary step to survive following its record $6.4 billion dollar loss for fiscal 2011. Investors have pinned high hopes on Hirai, who is held in high regard for turning the PlayStation division around and into a profit earner for the company.