A public-private fund might invest in struggling Sharp Corp. to lead the electronics maker's turnaround, sources close to the matter said.

The investment might amount to around ¥200 billion ($1.7 billion), the sources said Saturday. Sharp's liquid crystal display panel business is expected to post a higher than expected operating loss of ¥50 billion in the first half because of the economic slowdown in China, they said.

If Innovation Network Corp. of Japan chooses to invest, its support would be broader than earlier thought. Sharp, which secured a ¥225 billion ($1.9 billion) bailout from major banks in May, initially planned to accept investment only in its key display panel division, the sources said.

Taiwan's Hon Hai Precision Industry Co., better known as Foxconn, was said to have been interested in acquiring Sharp. But the Ministry of Economy, Trade and Industry, which has jurisdiction over INCJ, has expressed concern that Sharp's unique technologies, including its Igzo display panels for smartphones and other devices, could be siphoned off abroad, the sources said.

With a stake in Sharp, INCJ would be comprehensively involved in its reconstruction.

The Osaka-based firm, formerly a leading maker of high-end TVs and other electronics and a key supplier for Apple's iPhones, incurred a huge group net loss in the year ended in March amid a slump in its LCD panel division.

Sharp has also forecast a loss for the April to September half of this business year.