Embattled Japanese electronics company Sharp Corp is considering making a more than ￥100 billion (US$1.15 billion) public share offering early this year, a media report said yesterday.
The public offering could take place in the spring, with the firm hoping to use the funds to strengthen its mainstay LCD business and improve its creditworthiness, the Yomiuri Shimbun said.
Sharp has started talks with major creditor banks and wants to include the capital increase scheme in a mid-term business plan to be announced as early as next month, the mass-circulation daily said without naming its sources.
The cash-strapped electronics company last month said it had struck a ￥9.9 billion capital injection deal with US-based chipmaker Qualcomm Inc as it moves to repair its tattered balance sheet.
The Qualcomm deal will see the pair jointly develop energy-efficient LCD panels for smartphones using the Japanese firm’s technology, with the US company initially getting about 2.64 percent of Sharp’s stock.
Japan’s battered electronics sector has suffered from myriad problems, including a high yen, slowing demand in key export markets, fierce overseas competition and strategic mistakes that have left its finances in ruins.
Sharp has suffered a series of credit rating downgrades and warned it expects to lose about US$5.6 billion in the fiscal year to March.
The Osaka-based maker of Aquos brand electronics has announced thousands of job losses while cutting wages for employees — from the factory floor to the boardroom — and selling real estate to shore up its balance sheet.
Sharp last year said it had reached a capital injection deal worth about US$800 million with Taiwan’s Hon Hai Precision Industry Co (鴻海), which makes Apple Inc gadgets in China, but the deal stalled as Sharp’s share price nosedived.