Tue, Apr 15, 2014 - Page 14 News List

Sharp’s shares slump as it mulls raising capital

Bloomberg

Shares in Sharp Corp, a supplier of displays for Apple Inc’s iPhone and iPad, fell the most in more than 10 months after the company said it’s considering ways to increase capital.

Shares dropped 8.7 percent, the most since June 3 last year, to close at ¥273 in Tokyo trading.

Sharp is considering its options and has not decided on a method, it said in a filing to the Tokyo Stock Exchange on Sunday last week.

The company may raise about ¥200 billion (US$2 billion) in the fiscal year ending March next year, the Asahi Shimbun reported, without attribution.

Sharp forecast a return to profit in the last financial year due to cost reductions and demand for solar panels, after posting a combined ¥921 billion of losses in the previous two years.

Raising ¥200 billion would boost the company’s capital-to-asset ratio to as high as 20 percent from about 8 percent now, Asahi reported.

Osaka-based Sharp last year raised ¥137.7 billion through public and secondary offerings, including stock sales to Makita Corp, Denso Corp and Lixil Group Corp, according to an earnings statement on Feb. 4.

The company last year said it would wait at least 180 days before conducting another round of financing. The sale of stocks took effect in October last year, according to data compiled by Bloomberg.

The lockup period expired yesterday, Tokyo-based Sharp spokeswoman Miyuki Nakayama said.

Investors are concerned competition between display manufacturers is intensifying, Akino said, citing as an example the initial public offering of Japan Display Inc, a supplier of screens for Apple Inc devices.

Japan Display’s shares slumped 15 percent at its trading debut — the worst of any Asia-Pacific initial public offering worth more than US$1 billion since 2008.

Sharp, the maker of Aquos TVs, plans to unveil a new restructuring plan to help convince potential investors among financial institutions, Asahi said. The strategy will focus on cutting production costs at its Kameyama flat-panel factory to expand into the market for lower-priced smartphones, it said.

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