According to a report this morning in the Nikkei business daily, Japanese electronics major, Sony Corp is planning an initial public offering its financial unit, Sony Financial Holdings, to raise the equivalent of approximately $2.5 billion through a stock market listing in the second half of this year.

The IPO would be Japan''s biggest since last year''s $3.2 billion flotation of Aozora Bank Ltd., which was itself the largest in eight years, and likely rank as the top initial share offering in 2007.

Sony has already made a tentative application to the Tokyo Stock Exchange, the Nikkei said.

The report says Sony would sell at least 30 per cent of its stake in Sony Financial Holdings and use the proceeds amounting to around ¥300 billion to invest in strengthening its key products including flat TVs, video cameras and electronics parts.

A holding company, Sony Financial, which accounted for almost one-third of Sony''s operating profits from April to December 2006, oversees the electronics giant''s online banking and life insurance operations. According to the report, the financial arm would have a market capitalisation of at least ¥1 trillion, ranking it among the 10 Japanese banks.

Sony has invested aggressively in liquid crystal display (LCD) technology to compete with the likes of Matsushita Electric Industrial and Sharp Corp. in the flat TV market and is now the world''s largest LCD TV player.

It has also said it plans to start selling ultra-thin TVs using organic light-emitting diode (OLED) technology this year.

In 2005 Howard Stringer, CEO, Sony, unveiled a plan to sell off non-core assets and focus resources on electronics, which accounts for about 70 per cent of the group''s sales.