Sharp hitting up banks for ¥300 billion in loans

JIJI

Sharp Corp. has asked creditor banks to extend fresh loans totaling some ¥200 billion to ¥300 billion, according to sources.

Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ, two of Sharp’s major creditors, plan to scrutinize a reconstruction program now being drawn up by the ailing electronics maker, the sources said Wednesday.

The possibility of the creditor banks substantially cutting the lending amount can’t be ruled out because they are expected to demand Sharp offer collateral for most of the loans, they said.

Sharp reached a basic agreement in March to receive capital investment for a 9.9 percent stake from Hon Hai Precision Industry Co. of Taiwan to turn around its sluggish mainstay liquid crystal display panel and television operations.

But the investment amount is expected to fall sharply from the initially estimated ¥67 billion due to a plunge in Sharp’s stock price.

Facing prolonged negotiations with Hon Hai over the amount, Sharp found it necessary to seek fresh bank loans to keep its business rolling for the time being, the sources said.