Restructuring plan eases refinancing pressures

Sharp lenders OK ¥360 billion loans


Sharp Corp.’s main creditors are set to extend another ¥360 billion in loans to the struggling electronics maker after giving high marks to its restructuring plan, informed sources said.

The company will thus be able to secure funds to redeem commercial paper falling due this business year, which will end in March.

A total of ¥180 billion, including ¥150 billion in refinancing loans, will be extended by Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ, informed sources said Wednesday.

Other creditor financial institutions, including Resona Bank, Mizuho Trust & Banking Co. and Mitsubishi UFJ Trust and Banking Corp., will provide the rest next month or later, the sources said.

On Wednesday, Mizuho Corporate Bank decided to provide fresh loans to Sharp, and Bank of Tokyo-Mitsubishi UFJ is expected to follow with a similar decision by the end of the week, the sources said.

As part of its restructuring measures, Sharp is considering selling its liquid crystal display TV plants in Mexico and China to its Taiwanese partner, Hon Hai Precision Industry Co., better known as Foxconn.

The company is also mulling additional job cuts and sales of its real estate and shareholdings.

Still, there are lingering uncertainties about the firm’s mainstay LCD TV business, industry sources said.

“Downside risks remain over the company’s earnings,” said an executive at one creditor bank.

Sharp also will have to redeem ¥200 billion in convertible bonds in autumn 2013.

Solar batteries ditched


Sharp Corp. intends to withdraw from the solar battery business in the United States and Europe as the consumer electronics maker tries to streamline its money-losing operations, according to its restructuring plan.

In Japan, Sharp is looking to sell its solar battery manufacturing facilities in Nara, Osaka and Toyama prefectures to consolidate production at its plant in Sakai, Osaka Prefecture.

Sharp, a top manufacturer of solar batteries, will basically discontinue production and sales of such products by the end of March in the U.S. and European markets, where it has been incurring losses due partly to fierce competition from Chinese and other rivals.

The company is determined to focus its resources mainly at home as well as India and China, where strong growth is expected. In the domestic market, Sharp is eager to lift its market share of solar batteries for households to more than 40 percent from the current 30 percent, according to the plan.

The plan, obtained earlier this week, reveals that Sharp will sell the Katsuragi plant in Nara Prefecture and the Yao plant in Osaka Prefecture by around the end of March, while ending operations at its plant in Toyama Prefecture in the first half of the business year starting next April.

Though the profit margin of the solar battery business has deteriorated, the company expects the Japanese market to expand due to effects of government subsidies and the introduction of the law obliging utilities to buy renewable energy at fixed rates.