JAPAN’S SONY and Sweden’s Ericsson are preparing for the possibility of having to secure new financing at Sony Ericsson, their troubled joint venture that manufactures mobile phones.

Sony and Ericsson are considering a capital injection, or acting as guarantors on a loan for Sony Ericsson, to strengthen the joint venture’s balance sheet.

Carl-Henric Svanberg, chief executive of Ericsson, said a capital injection for Sony Ericsson was “not unlikely”, and that the Swedish company was preparing for the possibility.

He declined to comment on the size of the capital injection.

Sony said it was premature to speculate on whether it was preparing to provide Sony Ericsson with financing, adding: “Should that become necessary we are, of course, prepared to support Sony Ericsson in that way.”

Sony Ericsson is burning up cash as it runs up losses. Nomura analysts estimate that Sony and Ericsson could have to make a capital injection of €500 million ($665 million) each before the end of the year.