Sony selling Madison Avenue HQ building for $1.35 bn

TOKYO - Sony said Friday it was selling its US headquarters in Manhattan for US$1.1 billion (S$1.35 billion) as part of an overhaul aimed at rescuing the Japanese consumer electronics giant's tattered balance sheet.

New York-based commercial property firm Chetrit Group would buy the Madison Avenue building in a deal expected to close in March, Sony said.

"Sony is undertaking a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth," it said in a statement announcing the sale.

"At the same time, Sony is balancing cash inflows and outflows while working to improve its cash flow by carefully selecting investments, selling assets and strengthening control of working capital such as inventory. This sale is made as a part of such initiatives."

The deal would net Sony about $770 million after paying off building-related debt and transaction costs, it said.

Sony added it was was "re-evaluating" its earnings outlook - which forecasts a 20 billion yen ($223 million) annual net profit - "to take into account this sale and other factors that might affect such forecast".

The firm has reported huge losses, spending the past four years in the red.

The sale comes as Japanese media reported this month that the embattled firm was also planning to sell one of its main buildings in Tokyo's Osaki district, which accommodates Sony's struggling television division.