OSAKA – Sharp Corp. is planning to ask its major creditor banks for ¥150 billion in additional assistance, in line with a rehabilitation plan under a government-backed corporation turnaround fund, sources said.
Under the restructuring plan of the Innovation Network Corp. of Japan, the struggling electronics manufacturer will spin off its loss-making liquid crystal display business.
The fund will invest some ¥200 billion in Sharp to secure a majority stake with the aim of taking the lead in its rehabilitation, the sources said Monday.
Sharp’s interest-bearing debt stood at about ¥760 billion as of September. Of this sum, about ¥150 billion will be transferred to a new entity to be created by the spinoff of its LCD business and will be converted to preferred shares through a debt-for-equity swap, the sources said.
Sharp’s two major creditor banks — Mizuho Bank and the Bank of Tokyo-Mitsubishi UFJ — extended a total of ¥200 billion in loans to Sharp last June.
The sources said Taiwan’s Hon Hai Precision Industry Co., known for its Foxconn brand, has proposed buying Sharp or investing in the LCD business, while investment funds and Samsung Electronics Co. of South Korea are offering to purchase it entirely or some of its businesses.
While Sharp is likely to study the INCJ’s plan as the most plausible option, it may also consider other proposals if talks with the corporate turnaround body fail.
The sources said INCJ aims to integrate Sharp’s LCD business with Japan Display Inc., an LCD-maker in which the public-private sector fund has a stake.
With the envisioned integration, the INCJ hopes to boost Japan’s global competitive edge by forming the alliance between the sector heavyweights.
The INCJ is also supporting a realignment of Japanese electronics appliance manufacturers by the possible integration of Sharp’s white goods business with Toshiba Corp., which is reeling in the wake of a major accounting scandal, the sources said.
Sharp chalked up a group net loss of ¥83.61 billion for the first half of fiscal 2015.