Sony has long been in financial trouble given the dwindling electronics sales of the company. In fact, the company has been registering net losses rather than any profits for many years now. The company has now sold its New York headquarters in a deal raking in a whopping $1.1 billion, evidently to bring more cash in and improve profits.
Sony has struggled in recent years to cut down on its losses and return to profitability. However, most of these efforts have proved futile. As a result, the company has been tried hard to gather up its core resources and dispose the rest off so as to incur the much-needed cash.
To this end, the company has also decided to slash down on some 10,000 jobs, which gives a hint of the internal affairs of Sony and its performance. Sony’s New York headquarters is located at 550 Madison Avenue. It is an entire building that Sony has owned for a long time.
With its sale, the company hopes that it would be able to gain an operating income of $7.6 million. At the same time, Sony will not be moving out of the building immediately. Rather, Sony will stay in the building for the next three years as part of a leaseback agreement.
The sale, analysts say, is meant to let the company register a new profit at the group level and ensure that the free cash flow at the group level is positive. We also expect that the company will further do away with other facilities and resources that are not critical to the company itself.
Courtesy: The Globe and Mail