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Sony sells Manhattan headquarters skyscraper for $1.1bn | Sony sells Manhattan headquarters skyscraper for $1.1bn |
(3 days later) | |
Sony is to sell its US headquarters in Manhattan for $1.1bn (£690m). | Sony is to sell its US headquarters in Manhattan for $1.1bn (£690m). |
The skyscraper on Madison Avenue will be bought by the Chetrit Group, a major family-owned New York property group. | The skyscraper on Madison Avenue will be bought by the Chetrit Group, a major family-owned New York property group. |
The news, as well as further weakening of the yen's value, lifted shares in the troubled Japanese conglomerate 12% on the Tokyo stock exchange on Friday. | The news, as well as further weakening of the yen's value, lifted shares in the troubled Japanese conglomerate 12% on the Tokyo stock exchange on Friday. |
Sony admitted that the motivation for the sale was to raise much-needed cash, expected to equal $770m, after debts on the building have been repaid. | Sony admitted that the motivation for the sale was to raise much-needed cash, expected to equal $770m, after debts on the building have been repaid. |
The firm will also record a windfall profit in its accounts, as the building is being sold at a gain of £685m, compared with the price that Sony originally paid for it in 2002. | The firm will also record a windfall profit in its accounts, as the building is being sold at a gain of £685m, compared with the price that Sony originally paid for it in 2002. |
The firm said that it will continue to lease the building back for another three years following the sale, which is expected to be completed in March. | The firm said that it will continue to lease the building back for another three years following the sale, which is expected to be completed in March. |
The skyscraper houses 1,500 Sony employees, including its music and films businesses. | The skyscraper houses 1,500 Sony employees, including its music and films businesses. |
Ignominious decline | Ignominious decline |
The 37-floor building was first constructed for US telecoms group AT&T in 1984, at a time when Sony was in the ascendant thanks largely to the success of the Walkman. | |
The company has since fallen back to earth, and last year its share price was trading below the 1,000-yen level for the first time in over two decades. | The company has since fallen back to earth, and last year its share price was trading below the 1,000-yen level for the first time in over two decades. |
On Friday, its shares ended the day in Tokyo at 1,149 yen - a fraction of their peak of 16,950 yen at the height of the Japanese stock market bubble in 2000. | On Friday, its shares ended the day in Tokyo at 1,149 yen - a fraction of their peak of 16,950 yen at the height of the Japanese stock market bubble in 2000. |
Having recorded a loss every year for the last four years, Sony has embarked upon a major restructuring of its business, including the sell-off of its chemicals division, and cutting 10,000 jobs. | Having recorded a loss every year for the last four years, Sony has embarked upon a major restructuring of its business, including the sell-off of its chemicals division, and cutting 10,000 jobs. |
The company has failed to compete with foreign competitors - sophisticated US firms such as Microsoft, Apple and Google, and cheaper Asian competitors such as LG. | The company has failed to compete with foreign competitors - sophisticated US firms such as Microsoft, Apple and Google, and cheaper Asian competitors such as LG. |
The company - like other major Japanese manufacturers such as Panasonic and Sharp - has not been helped by the yen, which continued to strengthen before, during and after the 2008 financial crisis, and has only recently begun to lose some of its value. | The company - like other major Japanese manufacturers such as Panasonic and Sharp - has not been helped by the yen, which continued to strengthen before, during and after the 2008 financial crisis, and has only recently begun to lose some of its value. |
In November, Sony suffered the ignominy of having its credit rating downgraded to "junk" by Fitch - indicating that the ratings agency has serious doubts about whether Sony will be able to repay its debts. | In November, Sony suffered the ignominy of having its credit rating downgraded to "junk" by Fitch - indicating that the ratings agency has serious doubts about whether Sony will be able to repay its debts. |
As well as its US regional headquarters, Sony has also indicated its willingness to sell the building housing its television business in Tokyo. | As well as its US regional headquarters, Sony has also indicated its willingness to sell the building housing its television business in Tokyo. |
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