Audio-equipment maker Aiwa Co. said Wednesday its group net loss increased to 46.58 billion yen in fiscal 2001, up from 39.01 billion yen a year earlier, due to large retirement benefit payouts related to workforce cuts necessitated by its planned integration with Sony Corp.

Aiwa said its pretax loss in fiscal 2001 amounted to 19.13 billion yen, down from the previous year's 24.6 billion yen. Sales dropped 33 percent to 196.36 billion yen. Per-share net loss came to 423.63 yen, down from 590.17 yen a year earlier. The company will skip a dividend payment in the year, as it did in fiscal 2000.

The company blamed the plunge in sales on the protracted slump in the audio-equipment market, particularly in developed countries.

It attributed the increased net loss to an extraordinary loss of 29.61 billion yen, created by such factors as an 8.2 billion yen retirement benefit payout, a 5.6 billion yen capital loss associated with the sale of its factory equipment and a 4.7 billion yen cost related to inventories.

Aiwa said its board of directors on Wednesday approved a proposal to make the company a wholly owned subsidiary of Sony. Under the stock swap scheme to bring Aiwa under the Sony umbrella, Aiwa's shareholders will hand over their equity holdings to Sony on Oct. 1 in exchange for new Sony shares that Sony will float and assign at the time.