TOKYO -- The Tokyo Stock Exchange will pull the plug on its listing of Onkyo Home Entertainment -- once a household name in turntables, stereos and home cinemas -- due to it being mired in negative net worth.
Onkyo reported Wednesday that it expects to book 2.3 billion yen ($20.8 million) in liabilities exceeding assets for the financial year ended the same day. That would mark the second consecutive fiscal year of being in that situation, which triggers the delisting process.
In response, the TSE said it has designated Onkyo as a security under supervision, the first step toward being ejected from the bourse.
Onkyo has traded on the Jasdaq market since 2003. The company forecast Wednesday that it will turn in a net loss of 5.9 billion yen for fiscal 2020. That follows the 9.8 billion-yen loss for the previous fiscal year.
In January, Onkyo shareholders approved a plan to grant stock options to international funds, which would raise up to 6.2 billion yen in fresh equity. But only 1.2 billion yen worth of the options have been exercised.
Onkyo said one investment group ultimately decided against exercising the stock options despite a series of discussions. The company raised 2.1 billion yen in capital from issuing class C shares to 12 recipients, but it was not enough to cover the hole.