Thu, Mar 28, 2013 - Page 15 News List

Sharp mulls seeking investment from buyout funds

Bloomberg

Sharp Corp, the Japanese electronics maker forecasting a record loss, is considering seeking investments from private-equity funds to replenish dwindling cash levels, two people familiar with the matter said.

The company is also considering selling shares to the public as an option, the people said, asking not to be identified as the discussions are private.

Details of the funding could be included in Sharp’s mid-term plan, which may be released in May, the people said.

Sharp’s cash pile tumbled to ¥164 billion (US$1.7 billion) as of Dec. 31, the lowest level based on records stretching back to 1992, amid slumping earnings.

The Osaka-based company, bracing for ¥200 billion of convertible bonds maturing this year, is seeking to raise funds by agreeing to sell stakes to Qualcomm Inc and Samsung Electronics Co.

A deadline for an investment from Foxconn Technology Group (富士康科技集團) expired yesterday without a deal.

“Sharp is looking at various measures to raise funds,” company spokeswoman Miyuki Nakayama said by phone yesterday, declining to elaborate.

Sharp is also trying to develop business alliances and include them in its next business plan to revive earnings, one of the people said.

In September, Sharp signed an agreement with Japanese banks for a ¥360 billion loan. The company secured ¥30 billion in funds from three banks this month, three people familiar with the matter said on March 14.

Five straight quarters of losses eroded Sharp’s equity to 10 percent of its assets by the end of last year, compared with 30 percent a year earlier.

Japanese manufacturers including Olympus Corp and Mazda Motor Corp sold new shares last year after their so-called equity ratio fell below 20 percent to protect their credit ratings.

In December last year, Sharp said that Qualcomm, the biggest manufacturer of mobile-phone chips in the world, would pay as much as ¥9.9 billion for a stake and would cooperate on display technology.

Samsung, the world’s biggest smartphone maker, said on March 6 it would spend ¥10.4 billion buying Sharp stock to secure a supply of liquidi crystal displays.

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