Feb. 24 (Bloomberg) -- Shareholders of Sanyo Electric Co. approved a 300 billion yen ($2.6 billion) bailout plan that will give three banks including Goldman Sachs Group Inc. management control of the electronics maker to help it recover from losses.

Shareholders today approved the plan to sell preferred stock to Goldman, Sumitomo Mitsui Financial Group Inc. and Daiwa Securities SMBC Co. The banks will pay the equivalent of 70 yen per share, or about a quarter of today's price, giving them 49.8 percent of the Osaka-based company and five of nine board seats.

Sanyo, the world's largest maker of rechargeable batteries, needs cash to pay for a three-year plan to cut 15 percent of its workforce, close factories and reduce costs. The company expects a second year of record losses as falling prices of televisions, cameras and other electronics dent margins.

``I bought the stock when it was at 980 yen, and this is my first time coming to the shareholders meeting,'' said Kiyoko Kawaguchi, a 64-year-old who lives off her pension, on her way to the meeting. ``I want to hear for myself whether the company is doomed, or whether there is hope with this new management.''

Shares of Sanyo closed unchanged at 285 yen, after falling as much as 1.8 percent, at the 3 p.m. close on the Tokyo Stock Exchange. The stock, the worst performer on the Nikkei 225 Stock Average in the past two years, has dropped 18 percent since Sanyo announced on Jan. 25 the share sale.

Three-Hour Meeting

The yield on Sanyo's 2.02 percent bond due in August 2014 was 4.31 percent today, according to the Japan Securities Dealers Association, up 5 basis points. Its price fell 0.264 yen, the biggest decline in two weeks, to 85.795 yen.

The new board members will include Koichi Maeda, a former president of SMFG Corporate Recovery Servicer Co., a corporate revival expert, and Goldman Sachs's Ankur Sahu, who was responsible for investing in chip companies.

They will need to work with Chairwoman Tomoyo Nonaka, a former journalist appointed in July with no corporate management experience, and President Toshimasa Iue, grandson of the founder.

Today's meeting lasted for 3 hours and 5 minutes, as Nonaka and Iue fielded complaints from shareholders that the shares are being sold too cheaply and that existing shareholders should also get shares for 70 yen.

`Necessity'

Some shareholders lent support by saying the capital injection was ``unavoidable,'' as Nonaka and Iue repeatedly asked for ``just one more chance'' to turn the company around. Of Sanyo's 238,324 shareholders, 2,184 were present at the meeting, and 72,009 cast their votes ahead of the meeting. The company didn't disclose the vote tally.

``The capital injection is a necessity, but as an existing shareholder I can't help but feel discriminated against,'' said a retired Sanyo employee, who declined to be named. ``It's good that the company was able to get the cash from foreign and domestic banks, but 70 yen was probably a bit too cheap.''

Nonaka and Iue in July announced a plan to reduce costs by eliminating 14,000 jobs over three years, and cut interest- bearing debt by 50 percent, foster alliances with companies and focus its resources on solar panels, rechargeable batteries, medical technology, water-processing equipment and businesses related to the environment and energy.

The company has made some progress. In the past month, Sanyo closed a cathode-ray tube TV factory in Spain, and said it will stop making organic light-emitting diode displays, used in car stereos, portable music players and other electronic devices.

Alliances

This month, Sanyo announced a venture with Finland's Nokia Oyj, the world's biggest mobile-phone maker, to help expand handset sales and share development costs for high-speed phones. It also said in January that it will develop rechargeable nickel-metal hydride battery systems for gasoline-electric hybrid vehicles with Volkswagen AG.

Sanyo, which is also the world's second-largest maker of solar panels behind Sharp Corp., in November widened its loss forecast to a record 233 billion yen for the year ending March 31. Moody's Investors Service cut its rating on Sanyo by one level to Baa2, and Standard & Poor's lowered its credit rating on the company to junk level a week after the loss forecast was widened.

To contact the reporter on this story: Daisuke Takato in Tokyo at dtakato@bloomberg.net

Last Updated: February 24, 2006 04:31 EST