UPDATE 3-NEC plans $1.5 bln share sale after losses
* Money to help NEC restructure, shift to cloud computing
* Issue to boost outstanding shares by 28 pct
* Restores capital eroded by semiconductor losses
* Not enough to put NEC on growth path -analyst
* NEC shares jump 10 pct vs Nikkei's 0.7 pct gain (Adds analyst comment, details)
TOKYO, Nov 6 (Reuters) - NEC Corp (6701.T), Japan's biggest PC maker, plans to raise 133.9 billion yen ($1.5 billion) via a share issue to help restore its battered capital base as it scrambles to cut costs in search of growth.
News of the capital raising, tipped by sources on Thursday, sent the firm's shares -- which have shed 60 percent over the last five months -- up 10.5 percent on Friday. [ID:nT210122]
NEC, which cut its full-year operating profit outlook by 40 percent last week, is desperate to shore up its capital, weakened by losses at semiconductor unit NEC Electronics (6723.T) and sluggish sales of network systems. [ID:nT9578]
The company, once the world's largest chipmaker, is facing mounting restructuring charges as it seeks to shed 290 billion yen in fixed costs in the year to March and prepare for its chip unit merger with Renesas Technology (6501.T) (6503.T).
"This will help NEC survive, but NEC needs to raise 400 billion yen to 500 billion yen to truly put it on a growth path," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.
"But that kind of money isn't possible unless Japanese electronics firms band together."
Japan's electronics makers have exhausted their resources in fighting one another over a shrinking domestic pie, while devotion to company-specific technologies has often frustrated efforts to merge operations.
But the global downturn has forced more firms to team up. Panasonic (6752.T) has launched a tender offer for Sanyo Electric Co Ltd (6764.T), while NEC has said it would merge its cellphone operations with Casio (6952.T) and Hitachi (6501.T).
"If Japanese firms want to win against the Samsungs of the world, they have to band together," said one Ministry of Economy official who was not authorised to talk to the media. "But if the economy recovers, pressure to consolidate may also ease."
NEC reported a net loss of about $108 million in the quarter just ended, driving its shareholder equity ratio -- a measure of how much shareholders would receive if a firm were liquidated -- to just under 21 percent. Continued...
