Mon, Oct 15, 2012 - Page 15 News List

Sharp Corp bailout banks planning for greater oversight

Bloomberg

Banks bailing out money-losing Sharp Corp to the tune of US$4.6 billion may increase their management oversight of the Japanese television maker to support its return to profit.

Mizuho Corporate Bank Ltd and Bank of Tokyo-Mitsubishi UFJ Ltd plan to send executives to Sharp, the Asahi Shimbun reported yesterday.

The lenders, based in Tokyo, are selecting the executives and plan to discuss the matter with the company, the newspaper reported, without saying how it obtained the information.

The report did not say how many executives may be sent to Sharp or what posts they may take.

The maker of Aquos TVs secured ¥360 billion (US$4.6 billion) of funding from Mizuho and Bank of Tokyo Mitsubishi-UFJ, it said on Sept. 28, after submitting cost-cutting proposals to the banks earlier.

Sharp has also been renegotiating a proposed stake sale to Taipei-based Hon Hai Group (鴻海集團) after widening its full-year loss forecast eightfold in August, triggering a slide in its share price.

Hon Hai agreed in March to invest ¥67 billion for a 9.9 percent stake in Sharp at ¥550 a share. Under the agreement, the transaction was to be completed by March next year.

The talks between two sides may continue until March, Sharp said last month.

Sharp’s share price rose 4.8 percent to ¥153 at the close of Tokyo trading on Friday. The stock dropped 4.6 percent the previous day to ¥146, the lowest level since November 1971.

The shares have slid 77 percent this year, the worst performer on Japan’s benchmark Nikkei 225 Stock Average.

Sharp will get a ¥180 billion loan from Bank of Tokyo-Mitsubishi UFJ and Mizuho Corp, the company said on Sept. 28. Another ¥180 billion in the form of a revolving credit facility due in June will also be extended to Japan’s biggest maker of liquid-crystal displays.

The TV maker may consider raising new funds, because it needs money for growth and to regain the trust of the market, a senior executive at the company said on Friday. The executive declined to be identified, citing company policy.

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