Sony said it expects the sale of the 37-story New York building to generate $770 million in net cash after repaying debt, while its various divisions will be allowed to remain for up to three years. The firm may be planning a similar move in Tokyo, which could score Sony another $1.14 billion to balance its budget. Sony listed these reasons for the move:
1. Sony is undertaking a range of initiatives to strengthen its financial foundation and business competitiveness and for future growth. 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.
2. Summary of assets to be sold
The move is simply one in a series of efforts to sell assets and cut jobs in response to four years of straight losses for Sony, which is currently re-evaluating its financial forecast based on the sale. As it stands, the company has predicted a 20 billion-yen ($223 million) profit for the fiscal year, which ends in March. This is a positive turnaround for Sony in the wake of its massive 457 billion-yen loss year. Sony Corp. of America president, Nicole Seligman said this:
"Given the opportunities and challenges in the current economic and real estate landscape, selling 550 Madison now is a timely and logical strategic move. Regarding our new headquarters, we continue to look at a number of spaces in Manhattan but have not yet made a decision about where to lease."