Japan Aviation Electronics Shares Slump After NEC's Plan to Cut Stake
By Kosaku Narioka
Japan Aviation Electronics Industry shares slid in the wake of weak quarterly results and news that its parent company plans to cut its stake in the electronics maker.
Shares in Japan Aviation were recently 17% lower at 2,526 yen after falling as much as 18% earlier Tuesday. Parent NEC Corp.'s shares were recently down 1.0%.
NEC said Monday after market close that it plans to sell about half of its 51% stake in Japan Aviation, which will then start a buyback.
Japan Aviation said it will spend Y67.26 billion ($456 million) to buy back up to 25.8 million shares, enough to acquire the 23.8 million shares NEC plans to offload. Japan Aviation said it would pay Y2,605 for each share, representing a 14% discount to Monday's closing price.
Japan Aviation, which makes connectors and other electronics equipment, said it has been considering ways to change its status as a listed subsidiary of a publicly-traded parent, in a bid to maximize its corporate value.
For the nine-month period ended Dec. 31, its net profit dropped 20% from a year earlier to Y10.78 billion, as revenue fell 6.8% to Y171.35 billion.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
January 30, 2024 00:18 ET (05:18 GMT)
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