LDP seeks Sharp plan before bailout

Bloomberg

Sharp Corp. must put together a plan to revive its fortunes before any injection of public funds can be considered, according to Liberal Democratic Party policy chief Akira Amari.

Sharp, the world’s worst performing major stock this year, is hemorrhaging cash and Fitch Ratings last week slashed its credit rating to junk status. Japan’s electronics sector is struggling to overcome the strong yen, poor demand for televisions and competition from South Korea’s Samsung Electronics Co.

“Sharp must have a plan to show what kind of technology it wants to build on to survive,” Amari, who has served as both trade and labor minister, said in an interview Tuesday. “They can’t just ask for public funds or assistance with rebuilding unless they can show how they will beat the competition afterward.”

Any government bailout may follow the precedent set by the rescue two years ago of Japan Airlines Corp., which wiped out shareholders. Domestic electronics firms including Sony Corp. and Panasonic Corp. have reported record losses and are responding by closing factories, firing workers and cutting costs.