UPDATE 1-Hitachi Chemical to sell majority in housing unit

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TOKYO, Oct 26 (Reuters) - Japan's Hitachi Chemical Co Ltd (4217.T: Quote, Profile, Research, Stock Buzz) said on Friday it would sell a majority stake in its loss-making housing equipment unit to Japanese private equity fund New Horizon Capital, as it sheds non-core businesses.

Wholly-owned Hitachi Housetec Co Ltd, which posted an operating loss of 837 million yen in the six months to September, has been hit by falling housing starts in regional Japan as well as rising raw material prices.

The move is the latest sign of reorganisation within the sprawling Hitachi Ltd (6501.T: Quote, Profile, Research, Stock Buzz) electronics group, which owns 51 percent of Hitachi Chemical and is trying to focus on growth businesses.

Shares of Hitachi Chemical were up 5.0 percent at 2,310 yen after the news, outrunning the benchmark Nikkei average .N225, which was up 0.66 percent.

Price and other details will be decided around year-end, Hitachi Chemical said in a release.

Reuters reported earlier that Hitachi Chemical was mulling the sale of the unit to a private equity firm. [ID:nTKG002869].