Hitachi to raise $4.6 bln, shares dive

By Mayumi Negishi

TOKYO (Reuters) - Hitachi Ltd, Japan's biggest electronics firm by sales, will raise up to $4.6 billion to shore up its capital, joining a scrum of Japanese firms tapping equity markets before a possible economic slowdown.

Hitachi, which is headed for its fourth straight annual loss, said it will raise up to 416 billion yen after fees, issuing 318 billion yen worth of shares and convertible bonds worth 100 billion yen.

The Monday announcement came as its shares headed for their biggest single-day slide in six months after sources told Reuters about the public stock issue, Hitachi's first in 27 years.

Hitachi, which has a joint venture with General Electric in nuclear power, will invest in its nuclear power, software services and lithium-ion batteries operations, while trimming losses.

But Hitachi has been forced to seek money before it could form a realistic plan for recovery, some analysts said.

"This amount is the absolute limit that Hitachi can seek from markets, but this may not be enough even to cover restructuring costs at such a mammoth firm, let alone invest in growth," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management Co.

"I don't think investors will want to put their money in. There are so many more deserving companies that need funds."

The share issue would boost Hitachi's shares outstanding by more than 30 percent.