President Kaoru Yano also said that NEC, which is under pressure from shareholders to lower its stake in NEC Electronics Corp., will keep its 70 percent stake in the unit, even after the chip maker said the stake could lead to a delisting.

"We have told [NEC Electronics] that we are not satisfied with their targets of 800 billion yen ($6.5 billion) in sales and 5 percent operating profit margin in 2009," Yano told a news conference. "As a shareholder, we hope for higher targets to help raise NEC's profitability."

U.S. funds NWQ Investment Management Co. and Perry Capital LLC have urged NEC to lower its stake in NEC Electronics to below 50 percent from 70 percent.

NEC Electronics said on Tuesday (July 10) that it could be delisted by the Tokyo Stock Exchange because more than 75 percent is held by a few "special" shareholders.

But Yano said this was no reason to reduce NEC's stake in the chip maker, if the Tokyo Stock Exchange implements new listing criteria under a set of proposed guidelines outlined last month.

"NEC does not need to change anything," Yano said. "We do not now mean to change our stake."

The Tokyo bourse can delist shares if more than 75 percent of the company's outstanding stock remains in the hands of 10 shareholders. NEC Electronics met that criteria as of the end of March.

"While NEC Electronics believes its shares will not be delisted under the new criteria, it will nonetheless continue to carefully monitor the changing criteria, and work diligently to maintain its listing on the Tokyo Stock Exchange," the chipmaker said in a statement.

The Tokyo bourse has placed NEC Electronics shares in a grace period for the purpose of delisting. The grace period will last until March 31, 2008.

By: DocMemory
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