Struggling Japanese electronics maker Sharp Corp. is considering raising around ¥100 billion through a public stock offering to help it repay ¥200 billion in debt due in September, sources said Friday.
The company’s main creditor banks, however, questioned the feasibility of the plan, pushing Sharp to consider other ways to raise capital, such as reducing the amount of new share sales as well as issuing preferential shares or subordinate bonds, the sources said.
Ratings agencies have cut Sharp to levels considered speculative, which has made it difficult for Sharp to raise money through issuing new bonds.
The company has formed capital alliances with U.S. telecommunication giant Qualcomm Inc. and Samsung Electronics Co. of South Korea, but receiving around ¥10 billion in investment from each would not be enough.
As Sharp is facing difficulty obtaining a nod about the plan from its main creditors, Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ, it may have to postpone to April announcing its medium-term management plan, which is slated for March, the sources added.