UPDATE 1-Japan's Hitachi to raise up to $4.5 bln -sources

* To raise up to Y300 bln in public share offering -sources

* Would mean dilution of 30 pct at current stock price

* To issue Y100 bln worth convertible bonds -sources

* Company announcement as early as Monday -sources

(Updates with details, background)

By Reiji Murai and Kentaro Hamada

TOKYO, Nov 15 (Reuters) - Hitachi Ltd (6501.T), Japan's biggest electronics firm by revenues, plans to raise up to 400 billion yen ($4.5 billion) by issuing new shares and convertible bonds to shore up its battered capital base, two sources familiar with the matter said.

The sources, who asked not to be identified ahead of an official announcement anticipated as early as Monday, said Hitachi plans to sell about 300 billion yen worth of shares and another 100 billion yen in convertible bonds.

The public share offering would be its first in 27 years.

No one could be immediately reached at Hitachi for comment.

Faced with its fourth straight year of losses, Hitachi's shareholders' equity ratio has slipped to just below 11 percent, roughly half that of rival NEC Corp (6701.T), which earlier this month announced it would raise up to $1.5 billion. [ID:nT212429]

The ratio is calculated by dividing shareholders' equity by total assets and is a measure of financial strength.

Issuing 300 billion yen worth of stock at Friday's closing price of 294 yen would boost Hitachi's shares outstanding by about 30 percent.

Hitachi, a sprawling conglomerate with more than 900 group firms, is trying to restructure unprofitable businesses while shifting resources to its power operations, which include nuclear power plants, railway systems, elevators and batteries for hybrid cars.

Some of the funds raised would help pay for this group restructuring, the sources said.

Hitachi launched a $3 billion bid earlier this year to make five listed units, including magnetic tape maker Hitachi Maxell (6810.T) and plant engineering firm Hitachi Plant Technologies Ltd (1970.T), wholly-owned. [ID:nT98959]

Hitachi also must shoulder an investment of about 80 billion yen to pave the way for a merger of Renesas Technology -- its chip venture with Mitsubishi Electric (6503.T) -- and chipmaker NEC Electronics (6723.T) next year. [ID:nT284448]

Massive losses have also taken their toll. Hitachi lost 787 billion yen in the past business year ended in March, a record for a Japanese manufacturer, and is forecasting a loss of 230 billion yen in the current year to March 2010. [ID:nT297614]

The share and convertible bond offering will mark the first major step by Takashi Kawamura, a veteran of the power business who took over as president in April, to shore up the finances.

Hitachi will be joining a rush of Japanese companies raising money from the stock market following a recovery in the benchmark Nikkei average .N225, which has rallied some 40 percent since hitting a low for the year in March.

Japanese firms have sold about $40 billion worth of shares so far this year, an almost nine-fold increase from $4.5 billion in the same period a year earlier, according to Thomson Reuters data.

Separately, sources told Reuters on Saturday that Mitsubishi UFJ Financial Group (8306.T) was planning to issue about $11 billion worth of shares, in the largest public offering by a Japanese financial firm on record. [ID:nBNG152533]

(Editing by Keiron Henderson)