OXFORD, United Kingdom-Ericsson has warned the financial market that it may need to invest another 530 million euros (US$520 million) into its cell-phone joint venture with Sony. The company also reported that the venture, after a small profit in the first quarter of the year, made a loss in quarter two and is now expected to make a loss for the full year due to a weaker global handset market and technical problems with some Sony Ericsson cell phones.
Under the terms of its agreement with Sony, Ericsson is committed to putting up to 530 million euros into Sony Ericsson by October 2003 if the joint venture’s equity-to-assets ratio falls below 30 percent and if Sony asks for the payment. However, any injection would represent a new call on the 3.46 billion euros (US$3.14 billion) Ericsson is planning to raise via an underwritten rights issue, which some analysts remain unconvinced is enough to see Ericsson through the current extended market downturn.
Meanwhile, Kurt Hellstr
