NEC president sparks talk of AOL Europe takeover

Koji Nishigaki, president of Japanese giant NEC, made London his only European point of call as he set out to reassure investors in the US and Europe about possible company restructuring.

NEC has the highest level of debt-to-equity in the industry at 1.91 to 1. Total debt stands at over £12bn. Nishigaki is reported to have said that part of the roughly £4bn the company had set aside for overseas investments might go into AOL Europe and Wanadoo, claiming that NEC was in talks with both. AOL declined comment, but sources close to the company emphatically deny that there are any talks or that there is any question of AOL Europe being for sale. The unit is currently 50 per cent owned by Bertelsmann, which has said that it will sell its share to AOL. The sources say that they are having standard talks with NEC about the agreement for bundling their software on NEC computers and on no other subject. Wanadoo also refused to comment. Nishigaki's more concrete plans include general talk of reorganising the company's manufacturing operations and of seeking a quote on the New York Stock Exchange. Two weeks ago the chairman of NEC suggested the company's semiconductor manufacturing interests might be floated off. NEC is the world's second largest chip manufacturer. But, in London, Nishigaki had modified this to floating some of the companies that operate manufacturing plants. NEC has broken Japanese convention by bringing in two advisors from Toyota to help it improve supply chain management. Observers say NEC's enormous size and the fact that affiliated companies are generally run by NEC executives on the verge of retirement will make any restructuring difficult.