Sharp could spin off Mie LCD plant

Kyodo, AFP-JIJI

Struggling Sharp Corp. may spin off a plant in Kameyama, Mie Prefecture, that produces liquid crystal display panels for smartphones and also invite investment from other companies to secure additional operating funds, sources said Friday.

Selling its air conditioner, copier and electronic components businesses, including LED production, as well as downsizing domestic TV assembly by ending its operations in Tochigi Prefecture, are also under consideration as part of restructuring efforts, the sources said.

“We must reduce our deficit as much as possible through the sale” of businesses, a senior Sharp official said.

The electronics giant could additionally put its stock holdings in other manufacturers up for sale, such as its 0.6 percent equity stake in Olympus Corp., 9.8 percent share of Eliiy Power Co., a manufacturer of lithium-ion batteries, and possibly its roughly 9 percent stake in Pioneer Corp., according to the sources.

Sharp also plans to further reduce its personnel after announcing earlier this month that it will slash 5,000 jobs, or 9 percent of its global workforce, by March 31 to turn around its business amid slumping television sales, they added.

The company already is preparing to sell off its overseas television assembly plants in Mexico and the Chinese city of Nanjing to Hon Hai Precision Industry Co., its Taiwanese business partner.

Sharp shares briefly soared 13 percent after the Nikkei business daily said Hon Hai wanted to double its planned stake in Sharp to 20 percent. Shares ended 5.14 percent higher at ¥184 in Tokyo on Friday.

The company denied media reports about the possible sales of its main businesses and Hon Hai’s seeking to raise its capital ratio to 20 percent.

Sharp reported a group net loss of ¥138.4 billion for the April to June quarter, nearly three times higher than the ¥49.2 billion loss it posted a year earlier, on sales of ¥458.6 billion, down 28.4 percent due to declining revenue from LCD televisions and LCD products.

While Hon Hai agreed in March to purchase a 9.9 percent stake in the company at ¥550 per share, the two sides have been in talks to lower the price because Sharp’s stock price has plummeted since revealing the full extent of its first-quarter losses.