Sharp discounts shares to raise up to $1.4B

Japanese firm seeks to rebuild balance sheet after losses

Sharp Corp., a supplier of screens to Apple Inc., will raise as much as 137 billion yen — $1.4 billion — by selling stock at a discount as the Japanese company seeks to rebuild its balance sheet after record annual losses.

Shares will be priced at 279 yen apiece, which is 4.1 percent lower than Monday’s closing price, Osaka-based Sharp said in a regulatory filing. Japan’s largest maker of liquid-crystal displays will raise as much as 119.1 billion yen from a public share sale and 17.4 billion yen from selling stock to Makita Corp., Denso Corp. and Lixil Group Corp., it said.

Sharp posted losses totaling 921 billion yen during the past two financial years amid intensified competition in LCDs and flat-panel TVs. The supplier for Apple’s iPhone and iPad is tapping into the Japanese equities rally after previously selling minority stakes to Samsung Electronics Co. and Qualcomm Inc.

Sharp last month said it would raise as much as 166.4 billion yen from the sale of stock. The company’s shares have slumped 23 percent since the plan was announced Sept. 18.

The stock dropped 8.2 percent to close at 291 yen in Tokyo trading before the announcement. Sharp shares have fallen 4 percent so far this year, while Japan’s benchmark Topix index has gained 33 percent.

In August, Sharp reported a net loss of 18 billion yen for the June quarter, narrower than the 138 billion yen loss a year earlier. Operating profit, or sales minus the cost of goods sold and administrative expenses, totaled 3 billion yen for the quarter, compared with a loss of 94 billion yen a year earlier, the company said. Sales rose 33 percent to 608 billion yen.

The maker of Aquos TVs is forecasting net income of 5 billion yen for the year to March 2014, its first annual profit in three years, after job cuts. The company sold a stake in its largest LCD plant to Taiwanese billionaire Terry Gou last year to boost sales through his Foxconn Technology Group, the world’s biggest contract manufacturer of electronics.

 

By Grace Huang, Bloomberg News

Sharp cuts off talks with Samsung over copier business tie-up

Sharp Corp. has cut off talks with Samsung Electronics Co. of South Korea over expanding their business collaboration to the copier business, sources said Wednesday.

The move comes after other Japanese firms, including Canon Inc. — which cross-licenses patents used in the production of copiers — opposed the plan over concerns that key technology would fall into the hands of the rival South Korean manufacturer, according to the sources.

Japanese manufacturers control a large share of the global copier market. Canon, Ricoh Co., Konica Minolta Inc. and Sharp, together with U.S. maker Xerox Corp., account for around 80 percent of the global market of mainstay copiers capable of printing on A3-size paper. Sharp alone is fifth in the global rankings of A3 copier shipments.

Sharp will continue talks with Samsung over their envisioned cooperation in white goods, with an eye to supplying products such as refrigerators and washing machines to Samsung on an original equipment manufacturer basis, the sources said.

Samsung initially sounded Sharp out about its acquisition of Sharp’s copier business. Sharp turned down the proposal and the two were looking to jointly set up a copier sales company.

Sharp received around ¥10.38 billion in investment from Samsung in March under a business and capital tie-up, as the Japanese company struggles to strengthen its financial footing.

Sharp logged a consolidated operating profit of ¥3 billion in the April-June quarter of the current business year as sales of liquid crystal display panels increased after the company started to supply Samsung under the tie-up.

 

Article published in The Japan Times