Struggling electronics maker Sharp Corp. plans to raise about ¥100 billion through a public stock offering to repay part of ¥200 billion in convertible debt due in September, sources said Tuesday.
The company's two main creditor banks — Mizuho Corporate Bank and the Bank of Tokyo-Mitsubishi UFJ — have signed off on the plan amid signs of a pickup in Sharp's performance, reversing an initial cautious stance, the sources said.
Sharp aims to secure the remaining ¥100 billion by expanding sales of liquid crystal display panels, the sources said.
In deciding the timing of the public stock offering, Sharp will take into account movement in its share price, the sources said.
They said it will announce on May 14 its group earnings results for the business year ended in March as well as its medium-term business plan through fiscal 2015.
As for the public share offering, the two main banks first opposed the plan due to concern it would undermine the value of stock held by existing shareholders and urged Sharp to reconsider ways of raising capital, eyeing selling some of its operations.
But the two banks have approved the plan, as Sharp now projects to return to the black on a group operating basis in the October-March period and anticipates an increase in LCD sales after concluding a capital and business tieup with Samsung Electronics Co. of South Korea.