Nov. 6 (Bloomberg) -- NEC Corp., Japan’s largest maker of personal computers, plans to raise as much as 134 billion yen ($1.5 billion) by selling stock to help fund new businesses and pay off debt.

The Tokyo-based company will sell as many as 537.5 million new shares to Japanese and overseas investors at a price determined between Nov. 18 to Nov. 20, NEC said in a statement today. Daiwa Securities SMBC Co. and Morgan Stanley are arranging the sale.

The stock gained as much as 12 percent on speculation the funds will help the unprofitable company weather the global economic recession. NEC, which last sold stock to the public in 2003, joins companies from Nomura Holdings Inc. to Malaysia’s Maxis Communications Bhd. in pursuing sales as equity markets rebound from the rout caused by Lehman Brothers Holdings Inc.’s bankruptcy last year.

“The sale will likely help NEC improve financial strength, but its growth strategy needs to be clearer,” said Tomoyuki Fujii, an analyst at Okasan Securities Co. The size of the deal “is within market expectations,” he said.

NEC rose 10 percent to close at 273 yen on the Tokyo Stock Exchange, the biggest gain since Nov. 4, 2008. The benchmark Nikkei 225 Stock Average climbed 0.7 percent.

Less Than Planned

The sale will increase NEC’s outstanding shares by 28 percent, spokesman Makoto Miyakawa said by telephone from Tokyo. NEC had planned to raise as much as 200 billion yen in stock and bonds, three people familiar with the plan said in August.

Toshiba Corp., Japan’s biggest memory chipmaker, in May raised 289.7 billion yen to obtain funds for investment in the company’s first stock sale since 1981.

Nomura, Japan’s biggest brokerage, last month said it aims to sell as much as 454.4 billion yen in stock, its largest-ever offering, to raise funds to expand investment banking and fixed income businesses outside Japan.

Japan’s three largest banks -- Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. -- have raised 1.8 trillion yen selling common stock since December 2008. The Nikkei has gained 11 percent this year, after a 42 percent decline in 2008.

Cloud Services

NEC aims to spend about 40 billion yen on development of so-called cloud services, where information is stored on remote computers and is accessed over the Internet, the company said. Development of more-advanced network gear will receive 20 billion yen, with another 20 billion spent to buy equipment making batteries for electric cars, it said.

NEC may also need to fund the reorganization and merger of its money losing chip unit, NEC Electronics Corp.

NEC Electronics, 70 percent owned by NEC, and Renesas Technology Corp., a venture between Hitachi Ltd. and Mitsubishi Electric Corp., said in September they agreed to merge operations in April. The parent companies will inject 200 billion yen into what may become the world’s third-largest chipmaker.

NEC will own 33 percent of the new company, called Renesas Electronics Corp., while Hitachi will own a 31 percent stake and Mitsubishi Electric will hold 25 percent, the companies said at the time. Renesas President Yasushi Akao will become the president of the new chipmaker, according to the statement.

Chip Losses

NEC Electronics has forecast its fifth straight year of losses because of lower demand for semiconductors used in cars, flat-panel televisions and handsets. The net loss in the 12 months ending March 31 will probably be 55 billion yen, wider than the 9 billion yen projected earlier, the company said last month.

Renesas, which posted a record loss last fiscal year, is consolidating production lines, cutting wages and reducing research spending to slash costs by about 80 billion yen in the 12 months ending March 2010, Akao said in April. The company will turn profitable next fiscal year, he said at the time.

NEC on Oct. 29 reiterated its earlier forecast to return to profit in the current fiscal year.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

Last Updated: November 6, 2009 01:23 EST