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Things seem to be getting a little tight at Sharp Japan Inc. as far as finances go. They might be forced to seek a partnership with Hon Hai Electronics and sell off some assets.


How do you think will this effect their MFP business?
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First thoughts from reading the article is if they are that short of cash R & D will could be one of the first cuts, and then the question is which arm of the R & D department do you cut?

Copiers, and printers produce additional revenue stream with consumables and parts. Would they give this up and sell the copier division just to get a quick fix of cash and then do with out that revenue stream in the future?
One thing to note -

Sharp’s Information Equipment group, which includes MFPs, is one of its only consistently profitable divisions. Not forever - but at least for now.

One other thing to note is for Sharp (very proud Japanese company) to take an investment from a competing Taiwanese company means this was a bold move. They even took time at the Sharp dealer meeting to explain it (not sure if the dealers gave a sh*t) but that is a big deal.

Sharp spent a fortune on its new 10G LCD facility, but by the time they finished building it LCDs had lost so much value that they could never pay it off. Sharp is in similar trouble with Solar.
I disagree about the rumor. A Nikkei analyst reported this in Japan. I'm thinking why would this analyst put his neck on the line, they have to have heard something.

I'll put this into perspective with recent baseball trade talks, an ESPN analyst reported that cole hammels was on the trading block with the Phillies. The GM of the Phillies did an interview at a local radio sports show and stated NO we are not looking to trade him and no we are not looking to trade our other top players either. The analyst and others still reported that this was true. Weeks later many of the Phillies were traded, the cashed in the season early, Hammels was not traded however it was not because they did want to, they just couldn't get the "right" package.

This is exactly what I'm seeing from Sharp USA, they need to hold the fort together until the ball drops, and we don't know what the outcome will be. What we do know is that the Sharp we know today will not be the Sharp we will know tomorrow.

It may be weeks or months before the dust settles, but I think KYO is the right choice if any. However, since all of the press there may b a pull back from Sharp in weeks to come.

It is very easy.

12 months from now, when all of the smoke blows away, Sharp Corp Japan will either be in or out of the copier business.

I personally think, in.

Sept 2013 is a "drop dead" date for Sharp Corp Japan re financial commitments.

12 months is only four quarters, which can be a long time in the copier business.

I acknowledge Sharp has made huge $ and continuing $ commitments in their very strong belief of the continuation of the current copier business, as is.

Is Sharp Corp profitable in the copier business, probably 99% true.

Will Sharp lose business because of the current potential business uncertainty, probably 99% true. There are very good competitive copier reps who can spin doubt.

The door to doubt has been opened. Sharp has to close it! That door will not close for several months based upon Sharp proving to the world it is not so!
Last edited by SalesServiceGuy

Think how this must be effecting the Sharp Dealer community! Even if it turns out not to be true, which I think it is, the competition will use FUD (Fear, Uncertainty, and Doubt) to stop customers from buying a Sharp MFD.

I know of one small Sharp \ Canon dealer based in RI that Sharp has funded them to open up in Boston. He hired a top Sales Manager ($$$) and leased space. If Sharp sells their copier business what happens to that agreement? Even if they honor the agreement they just made it 10 times harder for this RI dealer to sell Sharp effectively in Boston.

How about other dealers that have Sharp as their MAIN brand? I am not sure if there are any single line dealers anymore? But these Sharp dealers must be strengthening the relationship with their second line, and maybe reaching out to other Manufactures.

If Kyrocera does indeed buy Sharp, then the Kyrocera Dealers and maybe the Kyrocera \ Sharp dual line dealers will be the big winners.

The other big winner regardless of what happens is all of us who sell against Sharp. The uncertainty alone will tilt the playing field away from Sharp!
Read the Reuters post from Aug 17 - Sharp is "revamping".

"The Nikkei had earlier reported that Sharp was considering selling its copier, air-conditioner and LED businesses, with Kyocera Corp (6971.T), Daiwa House Industry Co (1925.T) and Daikin Industries Ltd (6367.T) among possible buyers or investors.

Sharp denied both reports, while a Hon Hai spokesman declined to comment.

Separately, the Jiji News Agency reported that Osaka-based Sharp was seeking a 50 billion yen ($630 million) capital increase, and is approaching U.S. investment funds, Kyocera, Toshiba Corp (6502.T), and others.

"It is true we are considering various matters for the recovery of our performance, and we will swiftly announce them if we make any decisions that need to be disclosed," Sharp said in one of its statements on Friday."
Originally posted by yeti:
So looks like this was all just a rumor

anybody think differently with the letter sharp just released?

Read carefully. You are all in the copier business, this is a business of careful word craft.

"The Nikkei had earlier reported that Sharp was considering selling its copier, air-conditioner and LED businesses, with Kyocera Corp, Daiwa House Industry Co and Daikin Industries Ltd among possible buyers or investors.

Sharp denied both reports, while a Hon Hai spokesman declined to comment. (My insert: Which owns 10% and wants 20%)

Separately, the Jiji News Agency reported that Osaka-based Sharp was seeking a 50 billion yen ($630 million) capital increase, and is approaching U.S. investment funds, Kyocera, Toshiba Corp, and others."

Wait a minute, What? They are not selling to Kyocera, just asking them for money? Oh that makes it better, or different. If that news leak occured prior to closing the deal (if there is or was a deal working wink wink) then somebody will be falling on a sword . I dont beleive Sharp is that careless. I think it is done and over with either way you decide.

If it walks like a duck, quacks like a duck and swims like duck, It's a duck!
Last edited by Yoda
Originally posted by copierlady:
Read the Reuters post from Aug 17 - Sharp is "revamping".

"The Nikkei had earlier reported that Sharp was considering selling its copier, air-conditioner and LED businesses, with Kyocera Corp (6971.T), Daiwa House Industry Co (1925.T) and Daikin Industries Ltd (6367.T) among possible buyers or investors.

Sharp denied both reports, while a Hon Hai spokesman declined to comment.

Separately, the Jiji News Agency reported that Osaka-based Sharp was seeking a 50 billion yen ($630 million) capital increase, and is approaching U.S. investment funds, Kyocera, Toshiba Corp (6502.T), and others.

"It is true we are considering various matters for the recovery of our performance, and we will swiftly announce them if we make any decisions that need to be disclosed," Sharp said in one of its statements on Friday."

Update 4 from Reuters (buried in the middle of the article)

"Sharp's two main lenders, units of Mizuho Financial Group and Mitsubishi UFJ Financial Group, are poring over the company's restructuring plan to determine how much it needs to survive as it also renegotiates terms of an investment by Taiwan's Hon Hai Precision Industry.

The Nikkei business daily said on Friday that Hon Hai was looking to double its stake in Sharp to about 20 percent from a 9.9 percent agreed in March, and wants to pay about 200 yen per share, compared with the 550 yen initially agreed.

The Nikkei had earlier reported that Sharp was considering selling its copier, air-conditioner and LED businesses, with Kyocera Corp, Daiwa House Industry Co and Daikin Industries Ltd among possible buyers or investors.

Sharp denied both reports, while a Hon Hai spokesman declined to comment."

Thats one way to get it from 550 yen per share to 200.

Nice work, I just read the story about Hon Hai wanting to decrease to 200 yen.

Reports are now conflicting and yes you have to try and read between the lines. I'll go out on a limb and beleive it's a done deal with Kyocera, I could be wrong (been wrong before), but there is just too much to this, maybe since the deal was not complete with Hon Hai, then why speak to Kyocera and Toshiba especially when they are competitors.
"Following the recent stock drop, Hon Hai has reopened talks to win a better deal that analysts estimate may yield Sharp only about a third of the 67 billion yen it was relying on to help bolster its finances.

That means Sharp may have to resort to selling other assets to make up the shortfall and convince lenders including Mizuho Financial Group and Mitsubishi UFJ Financial Group to help keep it solvent"
Toshiba Tec just spent $870M USD to buy IBM's Point of Sale division so I can only suspect they are financially and mentally "tapped out" to take on another big acquisition.

Toshiba Tec does relabel a Sharp low end copier known as an e203SD so there is some business relationship there.

I believe in the last 12 months Toshiba discontinued manufacturing LCD TV panels and began to source them from Sharp.
Last edited by SalesServiceGuy
Kyocera Corp (6971.T)has a very high current share price of 6971 Yen, about average for the last 12 months. By comparison Sharp is 178 Yen, 1/3rd the value of a year ago. Toshiba is 282 Yen, 90% of the value a year ago.

Kyocera is in partnership with several other Japanese Corp to build a 70MW solar power project at a cost of $307M USD. This would become Japan's largest plant supplying approx 22,000 homes.

Kyocera just established a special purpose company in partnership with a leasing company which will be engaged in the sale of electricity through solar power.

Interest in alternative energy has risen in Japan since the radiation crisis triggered by the destruction of Fukushima nuclear power plant in last year's earthquake and tsunami.

All but one of the nation's 54 reactors are shuttered, with the government struggling to persuade a wary public that it is safe to restart them.

Solar capacity in Japan has risen to more than 3,500 megawatts, helped by government subsidies for solar panels on homes, though it meets less than 1 percent of the nation's power demand and the capacity is less than a quarter that of Germany.

Kyocera, a manufacturer of solar panels, could need Sharp's solar power business as it is going to have to supply a lot of solar panels to meet the needs its $307M project.

Maybe Sharp copiers are not the primary interest of Kyocera?
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In all honesty I dont think Sharp wants to sell or even think about selling its copier unit. I think the bean counters may be telling them they must to raise enough money to just stay alive or Han Hai is telling them to dump it, or Han Hai leaked a story to get the share price down or the bankers that loaned them money are telling them to sell it to get their money back. Who knows.

One thing for certain. Someone, somewhere connected to or working with or for Sharp mentioned it to a reporter! I dont think this guy just made it up out of thin air! If he did then that is totally wrong. So right now we are at he said, she said. Its silly.
One thing for certain. Someone, somewhere connected to or working with or for Sharp mentioned it to a reporter! I dont think this guy just made it up out of thin air! If he did then that is totally wrong. So right now we are at he said, she said. Its silly.

I'm with you on this, I doubt the reporter from Nikkei made this up.
This is now a different reporter and news outlet? I think this says the same thing no?

Therefore, Sharp strongly denied news reports and speculation that it may sell such divisions or spin off the Kameyama plant, saying such actions would run counter to its business reconstruction efforts.

But at the end it says the opposite?


Unless Sharp is able to quickly rebuild flagship businesses through the tie-up, it is highly likely the firm will be forced to cut more jobs or sell profit-making divisions.

I'm confused.
news updated for Sharp,
* Sharp hires two consultants, including PwC, for report - sources

* Sharp's debt totals $16 billion

* Sharp shares fall 5.4 percent to 174 yen in Tokyo

By Taiga Uranaka and Nobuhiro Kubo

TOKYO, Aug 20 (Reuters) - Japan's embattled TV maker Sharp Corp will submit an asset appraisal report to its banks next month they will use to identify businesses the century-old company has to sell in return for funding, sources at the lenders said.

Sharp, with debt of 1.25 trillion yen ($16 billion), is scrambling for money to refinance as much as 360 billion yen of short-term commercial paper and a 200 billion-yen convertible bond maturing in September next year. While the unprofitable company may balk at giving up parts of its business that ranges from washing machines to solar panels, it can ill afford to resist a bank-led fire sale.

"I don't think Sharp holds much decision-making authority anymore," said Katsuhide Takahashi, a credit-sector specialist at Citigroup in Tokyo. "Sharp has a lot of pride, and now its reality has been turned upside down, it's not responding quickly enough."

Mizuho Financial Group and Mitsubishi UFJ Financial Group will provide several tens of billions of yen in stopgap financing until the report, being compiled by two consultants, including PricewaterhouseCoopers, is ready, the sources said on condition they weren't identified.

So far, Sharp has said it is considering various options to restructure its business in a bid to underpin its finances, without giving details. Its banks may wait until the consultants deliver their assessment of what Sharp owns, what it is worth, and where its liabilities lie before making specific demands on what it should sell.

"At the moment we have no comment," said Machiko Watanabe, a spokeswoman for PricewaterhouseCoopers.

Like rivals Sony Corp and Panasonic Corp, Sharp has been hammered by waning global TV demand and aggressive overseas competitors led by Samsung Electronics that are grabbing a bigger slice of a shrinking pie.

The creator of the electronic calculator, which has lost around $7 billion in market value this year, has warned it would report a 100 billion-yen operating loss this fiscal year, prompting ratings agencies to cut their credit ratings. The company said it will axe 5,000 jobs, about a tenth of its global workforce and its first redundancies in six decades.


Local media reports last week said Sharp will sell units ranging from its money-making copier business to its money-losing solar panel factory.

The level of funding needed will also depend on how much investment Sharp secures from Taiwanese partner, Hon Hai Precision Industry.

Hon Hai is renegotiating a planned 67 billion-yen investment in Sharp for a 10 percent stake that valued its shares at 550 yen. The stock since has fallen to below 180 yen, prompting Hon Hai to seek a lower price per share and a possible increase in its stake.

Hon Hai wanted 20 percent ownership of its fellow Apple Inc supplier for 200 yen per share, the Nikkei business daily reported on Friday, without saying where it obtained the information.

Sharp's shares fell 5.4 percent to 174 yen on Monday following a 13 percent jump on Friday on a splurge of local media reports of potential asset sales.

The Nikkei also said Sharp may sell its copier, air-conditioner and LED businesses. It identified potential buyers as Kyocera Corp, Daiwa House Industry Co and Daikin Industries Ltd. Sharp issued a statement through the Tokyo Stock Exchange denying the report.

Jiji News Agency reported the Osaka-based company was seeking a 50 billion-yen cash injection from sources including U.S. investment funds, Kyocera and Toshiba Corp.

Other media outlets said Sharp was asking for more than 100 billion yen for its solar panel plant in Sakai, western Japan, while other reports said the inventor of ever-sharp mechanical pencils may spin off its Kameyama plant, which makes LCD screens for Apple's iPad and latest iPhone.

Sharp's consumer electronics business accounts for almost two-fifths of revenue, with its home appliance business and a printers and cash registers unit making up a tenth of sales each. Its solar panel division is 8 percent of income, with the remainder of sales generated from LCD panels and other components.

The maker of Aquos TVs is mulling the sale of assets including TV assembly plants in Poland, Malaysia and Mexico, and office buildings in Tokyo, a company source told Reuters last week.

Sharp also holds around $500 million marketable securities in medical equipment maker Olympus Corp, flash memory chip maker Toshiba, audio-visual equipment maker Pioneer Corp and unlisted Eliiy Power Co, a lithium-ion battery joint venture.
If Sharp shares continue to slide......175 yen now, last week 200 yen, that's a 10% drop in the last few days.


Sharp Corp. 6753 SHCAF extended its recent drop by 2.3%, with month-to-date losses now at 37%. A report out Tuesday said the firm may be planning to cut 3,000 more jobs on top of 5,000 layoffs already announced.
Originally posted by yeti:

The company will submit an asset appraisal report to its banks next month that will identify businesses the century-old company has to sell in return for funding, sources at the company's lenders have told Reuters.

Nailed it. Its not up to Sharp anymore. They can deny all they want. Bankers are calling the shots now.
(Reuters) - Sharp Corp's main creditors Mizuho Corporate Bank and Mitsubishi UFJ Financial Group are considering extending about 200 billion yen ($2.52 billion) in new loans to the struggling TV maker, Japanese media reported, sending its shares higher on Thursday.

The embattled company, with debt of 1.25 trillion yen ($16 billion), is considering selling assets and cutting jobs as it scrambles for money to refinance as much as 360 billion yen of short-term commercial paper and a 200 billion-yen convertible bonds maturing in September next year.

Mizuho, part of the Mizuho Financial Group, and Mitsubishi UFJ are set to lend about 130 billion yen at the end of August and another 100 billion yen next month and will seek collateral this time, unlike previous loans, media said.

The loans would come on top of the 60 billion yen in stopgap financing they provided to Sharp in July to help the company meet its debt requirements, various media outlets reported.

Shares in Sharp, which has shed more than a third of its value since the beginning of August, climbed 3.3 percent by the midday break, compared with a flat benchmark Nikkei average.

"Sharp is asking two major banks to consider an appropriate amount of loans," said company spokeswoman Miyuki Nakayama, but she declined to identify the banks involved as well as the amounts being considered.

Mitsubishi UFJ and Mizuho, which are both major shareholders of Sharp, have far more to lose by letting the company go bust than propping it up with additional loans.

With limited exposure to Europe's debt crisis, Japanese banks have weathered the global economic uncertainty far better than their peers in Europe and the United States.

Sharp, for its part, said it is doing its best to minimize its debt.

The company's spokeswoman said Sharp is looking into various measures such as disposing cross-holdings and accounts receivable, but did not give any more specifics on the considerations.

Sharp holds shares in several companies, including Pioneer Corp and Sekisui House Ltd.

Sharp, which supplies the screens used in Apple Inc's blockbuster iPhones, is grappling with its first layoffs in six decades.

The company is considering cutting a further 3,000 jobs on top of the 5,000 it has already announced, a source familiar with the discussion told Reuters, by selling two TV assembly plants to Taiwanese partner Hon Hai Precision Industry.

Sources at the company's lenders have said Sharp will submit an asset appraisal report to its banks next month that will identify businesses it has to sell in return for funding.

The loan amount would also depend on how much investment Sharp secures from Hon Hai, the world's leading contract electronics manufacturer, which previously agreed to buy about a 10 percent stake at 550 yen per share.

As Sharp's condition has weakened -- shares have fallen some 72 percent this year to 186 yen -- Hon Hai has moved to renegotiate the March deal under which it would have invested $844 million.

The Japanese company's revised restructuring plan is not likely to be finalized until September, bankers involved in the process have said. ($1 = 79.2500 Japanese yen)

(Reporting by Chang-Ran Kim and James Topham. Writing by Mari Saito; Editing by Ken Wills)
I hope for the sake of all the Americans employed by Sharp that it doesnt sell the copier division. With redundency comes layoffs and even though they are competitors I dont want to see any more Americans layed off.

With that being said even if they keep copiers. It seems Sharp is critically crippled. Is it just putting off the inevitable?
By James Topham and Tim Kelly

TOKYO | Mon Aug 27, 2012 3:14pm IST

TOKYO (Reuters) - Taiwan's Hon Hai Precision Industry (2317.TW) Chairman Terry Gou said an agreement to buy a 9.9 percent stake in Sharp (6753.T) was unchanged "in principle," and that he hoped to conclude the deal with the struggling Japanese TV maker this week.

The two firms reached a deal in March valuing the shares of the cash-starved maker of Aquos TV at 550 yen each, but reopened talks this month after Sharp's stock slumped to around a third of that price as losses mounted.

Without the full 67 billion yen ($852 million) that the Taiwanese firm agreed to pay in March, Sharp would have to rely more on its banks or sell other assets to bolster its finances.

"I can't say anything before we come to a conclusion, (but) in principle, no changes," Gou said at Tokyo's Haneda Airport on Monday, without going into details.

He added, however, that what was more important than the size of the stake or the share price was how to improve Sharp's productivity through "strategic cooperation."

"This is our goal," he said.

The companies would stick to the 9.9 percent plan agreed in March, Japan's Yomiuri newspaper reported on Monday, quoting Sharp President Takashi Okuda as saying in an interview.

A larger stake of 10 percent or more would give Hon Hai the right to ask Japanese courts to break up the century-old company.

Okuda, in the Yomiuri interview, "did mention that our position of having a 9.9 percent investment ratio from Hon Hai still exists," Sharp spokeswoman Miyuki Nakayama said.

"We don't know if it will be agreed this month."

Gou, who was in Japan as part of a Taiwanese delegation of businessmen and politicians, later told reporters at a briefing that he would meet with Sharp executives from Thursday and hoped to conclude the deal this week.

Shares of Sharp jumped as much as 6 percent to 204 yen, the highest since August 13, following the newspaper report, on hopes that the deal remained intact and Sharp would get added financing from its creditors.


Like rivals Sony Corp (6758.T) and Panasonic Corp (6752.T), Sharp has been hammered by waning global TV demand and aggressive overseas competitors led by Samsung Electronics (005930.KS) that are grabbing a bigger slice of a shrinking pie.

Sharp may seek to raise extra cash from its Taiwanese partner by selling it two TV assembly plants, one in Mexico and one in China, employing around 3,000 people, Sharp's spokeswoman confirmed.

Gou did not comment on arrival when asked whether Hon Hai would purchase the plants.

The Hon Hai chairman has already purchased a 47 percent stake in Sharp's TV panel plant in Sakai, western Japan, helping the Japanese company lessen its exposure to losses at the facility.

Gou will visit the Sakai factory on Thursday, Taiwan's de facto embassy told Reuters.

Gou, 61, founded Hon Hai in 1974 as a maker of plastic parts for TVs and video game consoles. The business has grown since into one of the world's major builders of TVs, tablets and other consumer devices for other companies, including Apple (AAPL.O).

Forbes magazine in May ranked Gou, who reportedly owns a castle in Europe, as Taiwan's fourth-richest person, worth an estimated worth of $4.8 billion.


Sharp, with debt of 1.25 trillion yen, holds 360 billion yen of short-term loans and needs to refinance a 200 billion yen convertible bond in September next year.

The company is seeking help from its main banks, Mizuho Financial Group (8411.T) and Mitsubishi UFJ Financial Group (8306.T).

Those lenders will provide 250 billion in loans to Sharp by the end of March, with four insurance companies, including Nippon Life Insurance, providing an additional 100 billion, enough for the TV maker to cover its immediate debt obligations, the Nikkan Kogyo newspaper reported on Monday without citing sources.

Mizuho and Mitsubishi UFJ provided 66 billion yen in unsecured loans to Sharp in July, and this month have made as much as 150 billion yen available to the company, which it must back with collateral, a source at one of the banks told Reuters. The source said he had not heard about any additional amounts from insurers.

Other assets Sharp could sell include an office building in Tokyo that the company vacated this month, which analysts estimate could be worth around $500 million.

The company also holds around 40 billion yen in marketable securities, including stakes in car navigation maker Pioneer (6773.T), Toshiba Corp (6502.T) and medical equipment maker Olympus Corp (7733.T).

Shares in Sharp, which have fallen by more than two-thirds since January, closed up 2.6 percent at 197 yen on Monday, outpacing a 0.2 percent rise in the benchmark Nikkei average .N225. ($1 = 78.6500 Japanese yen)

(Additional reporting by Taiga Uranaka, Chang-Ran Kim and Mari Saito; Additional writing by Linda Sieg; Editing by Chris Gallagher)
The share price of Sharp Corp. rose 9.13 percent to close at the day's high of 215 Japanese yen on the Tokyo Stock Exchange Tuesday.

The rally was seen as a positive response to Taipei-based Hon Hai Group Chairman and founder Terry Gou's announcement in Tokyo a day earlier that he is committed to finalizing an agreement to take a capital stake in the struggling Japanese electronics firm.

Speaking at a news conference for a Taiwanese trade delegation visiting Japan, Gou said the details of the acquisition pact, such as the timing and the amount his group plans to pay per share, have not yet been finalized.

He stressed, however, that both Sharp and Hon Hai will need to work hard to make the deal work.

Local economists and market analysts said the Hon Hai-Sharp partnership could be a historic adventure, given the significant differences between Taiwanese and Japanese business management models and corporate cultures.

According to them, Taiwan-Japan industrial cooperation is basically not easy. But historical momentum is pushing the two sides closer, they said, adding that the Taiwanese government, business community and ordinary people alike should not hesitate to cheer Gou for his adventurous move.

The following are excerpts from the local media coverage of the latest developments in the Hon Hai-Sharp partnership:

United Daily News:

Sharp is one of Japan's leading electronics companies, known for its advanced LCD panels, solar energy technology and environmentally friendly home appliances, but it, like the Japanese economy as a whole, is facing an unprecedented management crisis.

Its share price nosedived from around 900 yen in January 2011 to a 30-year-low of 164 yen Aug. 15 this year.

Chen Yung-feng, a Tunghai University professor and chief executive of the school's Japan research center, said Sharp, like many other famous Japanese companies, has the edge in brand recognition, manufacturing know-how and technological improvement ability.

The company, however, is also plagued by shortcomings common to other Japanese industrial giants -- high production costs, rigidity and closed-mindedness, Chen said.

Moreover, he added, the ownership of large Japanese companies tends to be separate from management, a trend that has made many of them lack decisiveness, acuity and promptness.

In contrast, he said, the founding families of major Taiwanese companies usually still play a critical role in corporate management and tend to be more decisive and responsive during emergencies.

Given these differences in operational styles, it has traditionally been difficult for Taiwanese and Japanese companies to cooperate, Chen went on.

The fact that high-tech companies in both countries face development bottlenecks, however, now offers a historic opportunity for them to forge partnerships, he said.

The Hon Hai-Sharp deal, if successful, will allow the two companies to expand their global market shares, taking advantage of their synergy, such as Sharp's technological strength and Hon Hai's acuity and brand recognition in the Chinese-speaking world, he added. (Aug. 29, 2012).

China Times:

Hon Hai and Sharp originally reached an agreement in March for the Taiwanese conglomerate -- the world's largest contract electronics maker -- to acquire a 9.871 percent stake in Sharp for about US$800 million, or 550 Japanese yen (US$7.01) per share.

When Sharp's share price plunged earlier this month to one-thid of the agreement's price, Hon Hai said in a statement that the price for its acquisition of the Sharp stake will be renegotiated.

Gou's current Japan visit is expected to clarify the situation, with both companies hoping to release a joint statement before the end of August.

Industry sources said the joint statement will not touch on the Hon Hai acquisition price.

The statement will instead focus on the two companies' consensus on expanding their future cooperation, especially in tapping the vast Chinese market where Hon Hai has huge production bases.

Their common goals will include selling 1 million Sharp-brand mobile phones annually in China, consolidating Sharp's share of China's big-screen LCD TV market and tapping into North America's lower-end LCD TV market, the sources said.

Moreover, the sources added, Apple Inc., Hon Hai and Sharp will collaborate to fight against South Korean dominance in the global smartphone and LCD markets. Hon Hai
In this latest go round seems thing are somewhat rosier for Sharp.

"Their common goals will include selling 1 million Sharp-brand mobile phones annually in China, consolidating Sharp's share of China's big-screen LCD TV market and tapping into North America's lower-end LCD TV market, the sources said.

Moreover, the sources added, Apple Inc., Hon Hai and Sharp will collaborate to fight against South Korean dominance in the global smartphone and LCD markets".

No mention of copier in future plans?
Just as things seem to get better! The nightmare continues.


COMMENT-Japanese banks should kill the Sharp zombie
Thu Aug 30, 2012 3:41am EDT

* Japanese banks should let Sharp go bankrupt

* Sharp shows all that is wrong with Japanese business

* Bailing out Sharp may not turn company around

By Nachum Kaplan

Aug 30 (IFR) - The traditional way to kill a zombie is to put salt in its mouth and sew its lips shut. In the case of Japanese zombie companies, a better approach would be for creditor banks to stop bailing them out and let them go bankrupt. Electronics maker Sharp Corp looks just like a zombie in need of such slaying.
..... read rest at
And now for the damage control in the copier division....
Dear SIICA Dealers:

As many of you have recently read, Sharp Corporation is in the process of revitalizing our operations in order to be more competitive. While this process takes time, we are moving aggressively to position ourselves for future growth. However, during this period, there is often speculation about what we are going to do. While much of this has centered on other aspects of Sharp’s portfolio, a recent article appeared claiming Sharp was selling its copier business. I want to end any confusion or concerns you may have.

Let us be very clear:

1.Nikkei has released an article based on their own judgment, and the article is speculation. Sharp Corporation has not released nor acknowledged this article.
2.Sharp Corporation is under the process of revitalizing its business and is exploring all options to improve the financial condition of the company.
3.Sharp is not currently negotiating the sale of the businesses, such as Copier and Air-Conditioner that Nikkei has reported in their article.
It is important for you to know that these are the words of our Executive Management in Japan, not simply the opinion of local management. As you can imagine, a public company such as Sharp must be careful not to mislead any investors so they are cautious with their statements. However, the third point is what is most important for all of us.

As pointed out in numerous articles in the past few weeks, Sharp’s document business is profitable and we are in the process of launching some of our most innovative products and services for our dealer community.

We cannot control the speculation of the press and we cannot control competitors trying to take advantage of the dealer community. However, the SIICA team will continue to provide you with our support and outstanding products.

And that’s where this story and the rumors end.
we'll see, this is a letter from Sharp USA and they have NO control, better yet the investors and lenders will tell the C execs what they have to sell and keep as collatoral for the loans. It's no over, this month we'll see how Sharp emerges, all signs point to them wanting to reemerge as a consumer electronics company only.
The bad: Fridays 8/31/2012 13% stock drop, Han Hai's CEO leaving without a deal and the Apple screen factory lagging in production (which actually made it to my CBNC news page Friday)and S&P lowering bond rating to junk.

The Good (If you can call it that): The main lenders and (share holders) lent Sharp another 1.4 Billion (With a B) to make it through September.
Last edited by Yoda
Sharp Corp. (6753), the Japanese panel maker selling a stake to Foxconn Technology Group, fell in Tokyo trading after its credit ratings were cut and a report said the company offered to lower the price of the shares.

Sharp dropped as much as 8.1 percent to 182 yen and traded at 188 yen as of 1 p.m., extending the Osaka-based company’s decline this year to 72 percent. Hon Hai Precision Industry Co. (2317), Foxconn’s flagship company, rose to the highest level in four months in Taipei after reversing loss charges for the planned investment.

The shares that Taipei-based Foxconn agreed in March to buy for 550 yen each may instead be sold at the average price for Sharp shares, the Nikkei newspaper said yesterday, without citing anyone. Foxconn founder Terry Gou ended a visit to Japan last week without announcing a deal, and Standard & Poor’s cut Sharp’s long-term and short-term credit ratings on Aug. 31 to speculative grades, saying the ratings may be lowered further.

“Expectations that a final agreement with Foxconn was close have faded away, and the rating cuts raised concerns again for Sharp’s funding,” Tsunenori Ohmaki, an analyst at Tachibana Securities Co. in Tokyo, said by phone today.

Sharp President Takashi Okuda will visit Taiwan as early as this week to hold talks with Gou, the Sankei newspaper reported today, without citing anyone.

Miyuki Nakayama, a Tokyo-based spokeswoman for Sharp, declined to comment on the Sankei report, saying the company doesn’t comment on executive schedules. She said she was checking the Nikkei report.

Loss Provisions

Simon Hsing, a spokesman for Hon Hai, declined to comment on the Japanese media reports. Hon Hai jumped 6.6 percent to NT$90.40 as of 12:17 p.m., headed for the highest close since April 26. Foxconn Technology gained 4 percent to NT$118.50, while Taipei’s benchmark Taiex index rose 0.8 percent.

Foxconn, through Hon Hai and Foxconn Technology Co., agreed in March to buy 9.9 percent of Sharp for 67 billion yen ($856 million) in a sale of new shares. Hon Hai’s first-half results included loss provisions of NT$4.5 billion ($151 million) for the planned investment, and as the deal wasn’t approved by local authorities, it reversed the charge as of July 31, the Taipei- based company said Aug. 31. Foxconn Technology reversed provisions of NT$2.26 billion.

Hon Hai is the world’s largest contract manufacturer of electronics, while Foxconn Technology Co. makes computer cases.

Sharp is seeking to raise cash and cut costs as 706 billion yen ($9 billion) of its bonds, commercial paper and borrowings mature within one year. The company has said it will cut 5,000 jobs to help reduce fixed costs by 100 billion yen after the Japanese currency rose to a postwar high and slumping global TV demand led to a record loss last fiscal year.

Debts Coming Due

Sharp’s shares have plunged by more than half since Foxconn, through its two Taipei-listed units, agreed to purchase the stake. Hon Hai, maker of Apple Inc.’s iPad and iPhone, is Sharp’s largest supplier, according to data compiled by Bloomberg.

S&P lowered Sharp’s long-term rating two levels to BB+, the highest non-investment grade, saying the maker of Aquos televisions suffers from deteriorating market conditions and weak cash flow. The rating company also cut Sharp’s short-term rating to B, the highest non-investment grade.

The electronics maker, whose shares have had the biggest percentage decline on the MSCI Asia Pacific Index this year, was kept on a negative ratings watch.

Sharp is considering cutting bonuses as early as this winter in Japan to save between 20 billion yen and 30 billion yen, Kyodo news service reported yesterday, without saying where it got the information.
TOKYO (Reuters) - Japan's embattled Sharp Corp <6753.T> has mortgaged nearly all of its domestic offices and factories, including one which makes screens for Apple Inc's latest iPhone, to secure the fresh loans it needs to stay in business.

Sharp, which is waiting for a cash injection from Hon Hai Precision Industry Co Ltd <2317.TW>, said it has offered the properties as collateral for up to 150 billion yen ($1.92 billion) of credit from Mizuho Financial Group Inc <8411.T> and Mitsubishi UFJ Financial Group Inc <8306.T>.

The set of properties includes "almost all the business sites owned by Sharp in Japan," said company spokeswoman, Miyuki Nakayama.

Its two main banks have agreed to help the junk-rated company pay as much as 360 billion yen in short term commercial paper, on the condition that it puts up assets to cover the debt should it default.

Aside from its headquarters in Osaka and offices in Tokyo, the maker of Aquos TVs operates 11 factories in Japan where it assembles TVs, and makes display screens, washing machines, air conditioners, and solar panels.

Among them is the Kameyama plant in western Japan, which makes small displays for Apple and other customers. The facility has just started shipping screens to Apple for a new iPhone which analysts expect it to reveal at a press event on September 12.

Pessimism about Sharp's future has grown since Hon Hai's chairman Terry Gou last week cut short a trip to Japan, leaving without meeting Sharp executives to conclude an expected agreement for the Taiwanese company to buy a 9.9 percent stake in Sharp in return for much-needed cash.

Sharp, which wants to finish those talks as soon as possible, has said it wants to send its president Takashi Okuda to meet Gou in Taipei.

Gou, however, is stepping up the pressure on Sharp to give him greater influence by demanding a management role in the century-old Japanese firm as part of the deal.

($1 = 78.3150 Japanese yen)

(Reporting by Tim Kelly; Editing by Daniel Magnowski)
The 100-year-old inventor of mechanical pencils needs to pen a new plan to make it to 101.

Sharp Corp. (6753), Japan’s biggest liquid-crystal display maker, put up its Osaka headquarters and some plants as collateral last week to win bank loans after its credit ratings were cut to junk. The supplier to Apple Inc. (AAPL) is also renegotiating a stock sale to Taiwan’s Foxconn Technology Group as it tries to recover from record losses and a 70 percent slump in shares this year.

Within six months of assuming office, President Takashi Okuda, 59, is firing employees for the first time in six decades after widening Sharp’s full-year loss forecast eightfold on plunging demand for TVs. Sharp’s troubles are symptomatic of what’s ailing Japanese consumer electronics companies Sony Corp. (6758) and Panasonic Corp. (6752) as they compete with TVs and phones made by South Korea’s Samsung Electronics Co. (005930) and LG Electronics Inc. (066570)

“Sharp isn’t in a situation to think about the next century,” said Makoto Kikuchi, chief executive officer at Myojo Asset Management Japan Co., a Tokyo-based hedge fund advisory firm. “It’s a matter of whether the company can survive in the next 12 months.”

Okuda must raise funds for a company that’s burning through cash. Total liabilities reached 2 trillion yen ($26 billion) at the end of June, the highest since at least 2003 -- or more than four times sales in that quarter, according to data compiled by Bloomberg.

Terry Gou

Ratings companies aren’t making it any easier -- Moody’s Investors Service and Standard & Poor’s both downgraded Sharp’s credit ratings to speculative grade, or junk. Okuda’s efforts to raise funds by selling equity to Taiwan billionaire Terry Gou’s Foxconn group and its flagship Hon Hai Precision Industry Co. (2317) stalled after Sharp’s shares plunged to a 37-year low.

Foxconn wants a stake in Sharp to secure access to the latest technology for parts used by its biggest customer, Apple. In offering a lifeline, Gou is betting that Sharp, which invented the mechanical Ever-Ready Sharp Pencil in 1915, will continue providing it with key components for the iPads and iPhones (AAPL) that Foxconn assembles, while ensuring one of Apple’s important suppliers survives.

“If Hon Hai can’t come soon to help Sharp speed up development of products, lower manufacturing cost, improve supply-chain management, it’s probably hard to make an achievement,” Gou said in Tokyo last month. Meetings between the two companies during Gou’s visit didn’t produce a final agreement.

Sony, Panasonic

Gou has invested 66 billion yen of his own money into the display venture with Sharp.

Widening losses and weakening demand amid a strengthening yen is the story of Japan’s electronics companies. Sony last had a profit in the year ended March 2008, and Panasonic has been unprofitable in three of the past four years. Like Sharp, both companies changed their CEOs this year.

Investors are getting less optimistic: the $32 billion combined current market value of Sony, Panasonic and Sharp -- Japan’s three biggest TV makers -- is dwarfed by Samsung’s $163 billion and Apple’s $638 billion. Sharp’s value has fallen 92 percent from its December 1999 peak.

“The Japanese electronics industry is in a crisis as South Koreans and Chinese are catching up,” said Toshihiro Nagahama, chief economist at Dai-Ichi Life Insurance (8750) Research Institute in Tokyo. “Japan is good at making products with better performance, and that’s the easiest for newcomers to copy.”

Miyuki Nakayama, a spokeswoman for Sharp, declined to comment. The company fell 1.9 percent to 202 yen at the 3 p.m. close of trading in Tokyo.

LCD Factories

Sharp’s troubles began when the company relied on debt funding for its LCD factories in Kameyama and Sakai, which opened in 2004 and 2009, respectively. The investment for the two factories, totaling 1 trillion yen, weighed on Sharp as LCD prices started falling and a stronger yen ruined its competitiveness against Taiwanese and South Korean companies.

The average price of a 40-inch LCD panel used in TVs fell to $250 in the first quarter of 2012, less than a 10th of the $2,772 price in the fourth quarter of 2003, according to researcher DisplaySearch.

The factory in Sakai, near Osaka, is an example of Sharp’s poor investment decisions, said Jeff Loff, a senior analyst with Macquarie Capital Securities in Tokyo. The world’s only operational 10th-generation facility, suitable for 60-inch TV panels, has been underutilized and adding to a glut since operations began in 2009.

IPad Displays

Another mistake was converting a production line at the Kameyama plant into facilities for displays featuring the IGZO technology meant for iPads, Loff said. The transition was too aggressive, he said.

“It probably would have been wiser to wait to convert the factory until it could prove consistent supply capability at high volume,” Loff said. “The company looks to have placed too much emphasis on trying to serve Apple with IGZO tablet displays.”

Sharp, which started Sept. 15, 1912, with the invention of the snap belt buckle, is in talks with potential lenders including life insurance companies for a syndicated loan, a person with knowledge of the matter said last week. Mizuho Financial Group Inc. (8411) and Mitsubishi UFJ Financial Group Inc. (8306), Sharp’s two main banks, provided it with a short-term facility to help refinance its commercial papers, another person with knowledge of the matter has said.

Sharp’s Debt

The company had 706 billion yen of short-term debt maturing within 12 months and 314 billion yen in long-term debts at the end of June, according to its financial statement. Sharp’s cash and near cash stood at 218 billion yen at the time.

The plunge in share price hasn’t helped Sharp’s cause of raising equity from Gou’s Foxconn, which wants to renegotiate an initial plan unveiled in March. Gou’s group companies agreed in March to buy 9.9 percent of the Japanese manufacturer at 550 yen per share, a total bill of 67 billion yen. Separately, Sharp also sold a stake in the Sakai LCD plant to Gou for 66 billion yen to jointly run the factory.

Without Gou’s helping hand, Sharp may fail to secure financial support from banks, Kikuchi said.

“Banks may consider walking away if there is no sign of improvement in the next year,” he said.

To contact the reporters on this story: Naoko Fujimura in Tokyo at; Mariko Yasu in Tokyo at

To contact the editor responsible for this story: Michael Tighe at
(Reuters) - Japan's Sharp Corp said it will trim salaries of its managers by a tenth for a year and seek an across-the-board wage cut for other workers as the cash-strapped TV maker looks for fresh ways to save money.

In addition to a 10 percent pay cut, Sharp said in a statement on Tuesday it will also halve bonuses paid to managers, while seeking union agreement to lower the salaries of rank and file workers by 7 percent for a year, deeper than a 2 percent cut agreed in May.

The latest cost-paring should save the company 14 billion yen ($179 million), adding to savings it expects from plans to trim 5,000 jobs, or a tenth of its workforce, including 2,000 redundancies in Japan. Those layoffs are the first at the firm in more than 60 years.

By resorting to pay cuts Sharp may avoid having to add to those job losses and also be able to realize swifter cash savings. Redundancies in Japan are expensive, with workers typically receiving at least a year's salary in severance pay.

For now, Sharp, which is also negotiating a cash injection from Taiwan's Hon Hai Precision Industry Co Ltd, is relying on its main banks -- Mizuho Financial Group and Mitsubishi UFJ Financial Group -- for funding.

Sharp said last week it mortgaged nearly all of its domestic offices and factories, including one which makes screens for Apple Inc's latest iPhone, to secure the fresh loans of up to 150 billion yen it needs to stay in business.

($1 = 78.2900 Japanese yen)

(Reporting by Tim Kelly and Miki Kayaoka; Editing by Michael Watson and Muralikumar Anantharaman)
Sharp Corp. (6753) may lose more money than it forecast this year, analysts predict, increasing pressure on the struggling Japanese electronics maker to raise funds and complete a stake sale to Foxconn Technology Group.

The company likely will report a net loss of 295 billion yen ($3.8 billion) for the year ending March 31, according to the average estimates of seven analysts compiled by Bloomberg. Sharp last month forecast a 250 billion-yen net loss, eight times greater than originally predicted, because of its unprofitable TV and display units.

Shipments of smartphone panels were delayed after a defect was found during testing, the Osaka, Japan-based company said in August. The company also is experiencing lower-than-expected operation rates at a plant making displays for tablet computers, prompting analysts at Goldman Sachs Group Inc. and Deutsche Bank AG to lower their earnings estimates as Sharp prepares a revival plan for lenders.

“It’s possible that the company will cut forecasts,” Yasuo Nakane, a Deutsche analyst in Tokyo, said by phone. “If Sharp was to cut forecasts during the next quarter, rather than this quarter, that may cause troubles with its banks.”

Sharp’s net loss will probably total 324 billion yen this fiscal year, said Nakane, who previously estimated a 77.3 billion-yen loss.

Takashi Watanabe, a Goldman Sachs analyst, widened his estimates for Sharp’s operating loss to 161 billion yen this fiscal year, he said in a Sept. 11 report, citing lower-than- estimated panel output. The company last month projected a 100 billion-yen operating loss.

‘Harsh Business Circumstances’
Sharp said Sept. 11 it may revise earnings estimates because of “harsh business circumstances.”

“Changes in the forecasts for fiscal 2012 consolidated financial results will be announced separately once revisions are decided necessary,” the company said in a statement announcing payroll reductions.

Miyuki Nakayama, a spokeswoman for Sharp, declined to elaborate.

Sharp found a defect in its smartphone displays during a “dropping test,” Tetsuo Onishi, the senior executive managing officer in charge of accounting, said last month, declining to name the client. The defect is minor and probably won’t delay the client’s product release, he said.

Tablet Displays
“The unexpected delay in shipping suggests it would be a negative factor for Sharp’s earnings,” said Keita Wakabayashi, a Tokyo-based analyst at Mito Securities Co.

Sharp has started shipping screens for Apple Inc.’s iPhone 5, Marketwatch said today, citing an unidentified person. Hiroshi Takenami, a Sharp spokesman, declined to comment on the report. Apple unveiled the latest iPhone, which will go on sale Sept. 21, yesterday in the U.S.

Sharp’s plants making medium-sized displays also continue to be underutilized, Watanabe said. The factories may run at about 50 percent next fiscal year and 60 percent the year after, he said, lowering his estimates from 60 percent and 75 percent, respectively.

Sharp’s shares plunged to a 37-year-low after the company widened its loss forecast, prompting Foxconn to renegotiate a deal reached in March in which the Taiwanese group agreed to pay 67 billion yen for a 9.9 percent stake in Sharp. The companies haven’t announced a new agreement.

Sharp rose 1.4 percent to 212 yen as of the 11:30 a.m. break in Tokyo trading. The shares have declined 69 percent in Tokyo trading this year, making them the biggest percentage loser among more than 1,600 companies in the MSCI World Index. (MXWO)

Mechanical Pencils
The most pessimistic of the seven estimates for Sharp since Aug. 23 is for an annual loss of 350 billion yen, according to data compiled by Bloomberg. The most optimistic is for a 260 billion-yen loss in the year ending in March.

The electronics maker widened its full-year loss forecast from 30 billion yen. Sharp posted a 376 billion-yen net loss in the year ended March 31 as earnings were eroded by a strong yen and competition from TVs and phones made by Samsung Electronics Co. and LG Electronics Inc. (066570)

The 100-year-old inventor of mechanical pencils is seeking to raise cash and cut costs as it faces a total of 706 billion yen in bonds, commercial paper and borrowings maturing within one year. The company is cutting 5,000 jobs, its first workforce reduction since 1950, as part of plans to reduce fixed costs by 100 billion yen.

‘Recovery Won’t Happen’
Sharp is in talks with unions to cut wages and will reduce managers’ salaries and bonuses to trim another 14 billion yen in costs, it said Sept. 11. The company said last month it plans to return to operating profit in the fiscal second half, beginning Oct. 1.

“Sharp’s expected second-half recovery won’t happen,” Jeff Loff, a senior analyst at Macquarie Capital Securities in Tokyo, wrote in a report last week.

Losses from Sharp’s LCD business may total 137 billion yen this fiscal year, compared with the company’s August projection of 105 billion yen, Loff said, citing lower yields of displays using the technology known as IGZO. Those panels are thinner, have a higher resolution and use less energy than conventional models.

Sharp said last month it will improve the operation rate of its medium-size IGZO displays for tablet PCs by increasing the number of orders from large clients.

“There are risks that demand for its IGZO panels aren’t as much as the company had expected,” Deutsche’s Nakane said. “Sharp hasn’t found any other clients.”

Contingency Plan
Sharp is working on a contingency plan to present to banks as the company seeks help to refinance debt, Onishi said last week. The company has submitted a plan for returning to an operating profit in the second half and hired a specialist to evaluate assets and business plans, Onishi said.

The electronics maker is in talks with lenders including life insurance companies to raise funds through a new syndicated loan, a person with knowledge of the matter said this month.

Mizuho Financial Group Inc. (8411) and Mitsubishi UFJ Financial Group Inc. (8306), Sharp’s two main banks, provided the company with a short-term facility of 60 billion yen in July and an approximately 150 billion-yen credit last month to help the company refinance commercial papers, according to another person with knowledge of the matter.

‘Zero’ Value
Sharp’s liabilities reached 2 trillion yen at the end of June -- the most since at least 2003, according to data compiled by Bloomberg. The company put up its headquarters and some plants as collateral to win bank loans after its credit ratings were cut to junk by Moody’s Investors Service and Standard & Poor’s.

Sharp may have additional collateral capacity of as much as 480 billion yen, taking into account buildings and structures, machinery and equipment and marketable securities, Deutsche Bank AG analyst Akihito Murata said in a report yesterday. That may not be sufficient to cover Sharp’s more than 820 billion yen in bank loans and outstanding commercial paper as of the end of the first quarter, he said.

“We still do not believe that Sharp has sufficient fund procurement capacity,” Murata said in the report.

Loff at Macquarie downgraded the rating on the stock to underperform, or sell, from neutral, and cut the 12-month share- price estimate to 90 yen from 680 yen.

“If Sharp cannot turn around its display business, then we believe operating losses and weaker prospects for reducing debt could render the value of the equity zero,” he said.

To contact the reporters on this story: Mariko Yasu in Tokyo at; Shunichi Ozasa in Tokyo at

To contact the editor responsible for this story: Michael Tighe at
Sharp, LG and Japan Display Inc. (Sony/Hitachi/Toshiba) supply the Retina display. This will be a cash boon for these three companies. Samsung supplied most of the displays for the iPhone 4 but apparently no longer. Apple accounts for 8% of Samsung's total revenue.

Samsung supplies the iPhone 5's new A6 processor.

I would not put a fork in Sharp just yet. I would not be surprised that this forward looking data is partially why Sharp's main banks are willing to lend it the massive amounts of money that it needs to borrow.
Last edited by SalesServiceGuy
I'm not sure what the profit is on the displays are, but it can't be enough to be the savior of a company that is so deeply in debt. Sharp mortgaged all of their property for the loans thus they guaranteed the money to banks with assets. If this forward looking numbers were that great then I think the banks would not have asked for collatoral for the loans. In the past Sharp had borrowed money with putting up assets.

The sales of the iphone will help in the short term, but Sharp faces much bigger challanges, they need to figure out their core business. I'm sure Sharp will return to profit, it's just a question of what their core will be and can they turn it around quick enough that they will not have to sell their profitable operations.
Sharp's stock jumped 5% on Friday after a local media report said the Japanese display maker was in negotiations to make Intel its biggest shareholder.

The sources said the talks are focused on sealing a business alliance, although they did not rule out the possibility of Intel acquiring a stake in Sharp in the future.

The jewel in Sharp's technology portfolio is the IGZO display. It consumes much less power than conventional LCD displays, is thinner as it requires less back lighting, has a highly-sensitive touch screen, and boasts very high definition.

Intel is promoting ultra-thin laptops, known as ultrabooks, to counter tablet computers from Apple Inc. Earlier this year, the U.S. chipmaker signed deals with several panel makers to ensure adequate supplies for a wave of ultrabooks with touch screens expected to hit the market following Microsoft Corp's launch of Windows 8 in late October.

Sharp is expected to complete it's revival plan within days to present to the banks, which will decide to provide about 200 billion yen in additional loans, the sources said. The plan includes the sale of its U.S. solar power unit Recurrent Energy bought in 2010.
TOKYO (MarketWatch) -- Sharp Corp. is considering selling its TV assembly plant in Malaysia to its Taiwanese business partner Hon Hai Precision Industry Co. , Kyodo News reported Saturday, citing sources close to the issue.

As the Malaysian plant has around 2,000 workers, the job cuts by the cash-strapped Osaka-based company will total around 10,000, including already announced workforce reductions.

Sharp has almost decided to sell its TV assembly plants in Mexico and China to Hon Hai to focus on more lucrative fields, such as small and midsize liquid crystal displays for smartphones and tablet computers.

The Japanese company had around 56,000 employees on a consolidated basis as of the end of July. It has already announced a job cut of 5,000, and the planned sales of the Mexico and Chinese plants will bring about more than 3,000 reductions.

Sharp is expected to present its rehabilitation plan to its lenders by the end of this month.
I almost forgot about this.

Originally posted by Art Post:
Sharp teams up with SHI International Corp. of New Jersey

Creating expanded channel opportunities, Sharp and SHI are collaborating in a first-of-its kind alliance in the imaging industry, to bring SHI clients access to Sharp's full line of world-class imaging products. SHI is known for leveraging the broadest portfolio of IT products and solutions available, on a global scale. In this alliance, SHI will build on its reputation within the services industry, and significantly expand its product portfolio to all partners, including many Fortune 500 companies.

"Expanding channel opportunities, such as through our relationship with industry leader SHI, is a key component of our growth strategy," said Rich Boomsma, senior vice president, sales, Sharp Imaging and Information Company of America. "This collaboration will enable Sharp to provide broader access to large corporations for our dealers and channel partners."

SOURCE Sharp Electronics Corporation
Sharp Considers 10,000 Job Cuts

TOKYO—Sharp Corp. has submitted a new restructuring plan to its lenders setting out job cuts of more than 10,000 and the sale of assets including overseas plants, as the consumer-electronics maker seeks to convince banks it can return to profitability even without a planned cash infusion from Taiwan's Hon Hai Precision Industry Co.

A person briefed on the plan also said Tuesday that Sharp is in talks with Intel Corp. over a business tie-up involving the provision of small and midsize liquid-crystal-display technology, though this wasn't mentioned in the plan.

Under the plan, Sharp intends to cut wages while offloading ...
SYDNEY (MarketWatch) -- Sharp Corp's (JP:6753)(US:shcaf) lenders are expected to approve funding that will enable the firm to stay afloat through the current fiscal year, the Nikkei reported on Wednesday. Sharp's lenders Mizuho Corporate Bank and the Bank of Tokyo-Mitsubishi UFJ are expected to approve 180 billion yen ($2.3 billion) of loans lasting until June 2013, according to the report. The rest of the 360 billion yen in funding that Sharp needs will likely be supplied by a syndicated loan, according to the report.
TOKYO (Reuters) - Mizuho Financial Group and Mitsubishi UFJ Financial Group, the two main lenders to Sharp Corp, have approved a 210 billion yen bailout of Japan's troubled TV maker, sources said on Thursday, clearing a major obstacle to firm's survival.

The two banks have been orchestrating Sharp's funding plans in exchange for drastic changes at the century-old firm, including selling overseas TV assembly plants and shutting solar panel businesses in Europe and the United States.

Sharp, which produces air conditioners, microwave ovens and Aquos TVs, expects to lose more than 100 billion yen this business year, sources say, savaged by competition from rivals led by South Korea's Samsung Electronics.

The 210 billion yen of lending to be shared between its two key banks will come on top of 150 billion yen of loans already made to Sharp, which must repay as much as 360 billion yen of short-term commercial paper over the coming months.

Mizuho and Bank of Tokyo-Mitsubishi UFJ (BTMU), a core banking unit of Mitsubishi UFJ, want other firms including Resona Holdings to take over half of those 360 billion yen loans, said the sources, who had been briefed on the matter but declined to be named.

Sharp, Mizuho and Mitsubishi all declined to comment.

Sharp's shares closed down 3.9 percent on Thursday, compared with a 0.4 percent rise in Tokyo's benchmark Topix index.

The firm has already mortgaged most of its offices and factories in Japan, including one that makes displays for Apple Inc.'s iPhone and iPad, and it needs to convince banks it can return to profit in the next business year in order to unlock additional financing.

Sharp spent heavily to build the world's most advanced liquid crystal display plant in Sakai, western Japan, which started work in 2009. Losses sustained there undermined the business, and last month ratings agency Standard & Poor's downgraded the company's debt to junk.


In the business proposal submitted to lenders, Sharp predicted it can achieve an operating profit of 121 billion yen in the year beginning April 1, compared with an operating loss of 115 billion this term, the sources said. Given the uncertainty of sales picking up, much of the turnaround plan is based on cost cutting.

"We cannot count on revenue growth. We are making the plan under the worst-case scenario," said a senior banker at one of Sharp's main banks last week.

As part of that plan, Sharp would shut solar panel module assembly plants, one in the United States and one in Britain, the sources said. The company would also need to dissolve a partnership with Italy's leading power producer Enel SpA, which last year opened a joint panel production plant.

Sharp, which a decade ago was the world's leading maker of solar panels with around a fifth of the market, also plans to consolidate production at several Japanese sites into one location.

Other cost-cutting measures and asset sales Sharp has proposed include the sale of overseas TV assembly plants. Sharp is already in talks to sell plants in Mexico and China to Taiwanese partner and fellow Apple supplier Hon Hai Precision Industry Co. The two companies jointly operate a TV display plant in western Japan.

Sharp has also offered to sell a third assembly plant in Malaysia. Removing the workers at those sites from its payroll would, when added to 5,000 planned layoffs, shrink the company's workforce by more than 11,000 people, or by about a fifth.

The company is also asking its remaining workers to accept pay cuts as steep as a tenth of their salary.

Talks to sell a 9.9 stake to Hon Hai, a sale which would make the Taiwanese company its biggest shareholder, have, however, stalled after an agreement had been expected in August. Hon Hai has said it wants a management role in return for its cash.

Sharp has denied a local report that it is in talks to make Intel Corp its biggest stockholder instead, but sources have said it is in talks to supply panels for ultra-thin laptops that typically use processors made by Intel.

($1 = 77.7800 Japanese yen)

(Reporting by Reiji Murai, Nobuhiro Kubo, Taro Fuse and Taiga Uranaka; Editing by Daniel Magnowski)
Hon Hai Precision Industry Co. has asked Sharp Corp., currently under rehabilitation, to spin off its small and midsize liquid crystal display business into a joint venture between them, it has been learned.

In addition to establishing a joint company to produce and market LCD panels--a sector seen as Sharp's main source of revenue--the Taiwan firm is also demanding the Japanese company accept board members from Hon Hai, sources said.

Sharp is in talks with Hon Hai over the former's proposal that the Taiwan firm take a 9.9 percent stake in the electronics maker. In connection with the proposal, Hon Hai demanded Sharp spin off its LCD business, but the company appears reluctant to agree.

Under the circumstances, the direction of the tie-up negotiations between the two firms--key to Sharp's reconstruction--is becoming more uncertain.

Sharp's small and midsize LCD business is key to its rehabilitation.

Under its rehabilitation plans, Sharp aims to expand production of panels for tablet devices, such as Apple Inc.'s iPad, at its factories, including its plant in Kameyama, Mie Prefecture, where small and midsize LCD panels are manufactured. The company hopes to turn its earnings around to realize a net operating profit of 121.2 billion yen in fiscal 2013.

Meanwhile, Hon Hai's founder has taken an individual 37 percent stake in Sharp's Sakai plant in Sakai, Osaka Prefecture, equal to Sharp's stake in the factory.

If Hon Hai gains a stronger voice in the production of large LCD panels, as well as small and midsize ones, it is feared Sharp's management identity may be further chipped away.

In parallel with the talks with Hon Hai, Sharp began negotiations with Intel Corp. to see if the major U.S. semiconductor manufacturer will buy convertible bonds worth tens of billions of yen, hoping to conclude the talks by the end of this month.

Sharp also is mulling jointly developing Intel's Ultrabook, a light notebook-sized personal computer equipped with Sharp's unique state-of-the-art LCD panel, IGZO, and an Intel semiconductor.

Sharp is also in negotiations with several U.S. IT companies to sign long-term contracts to supply its LCD panels.


Partnership with 3 firms key

Sharp's future depends on how smoothly it can enhance its relationship with the

three foreign companies.

Its rehabilitation plans were compiled late last month on the assumption that the Japanese maker will have stronger ties with Hon Hai, Intel and Apple.

Sharp sees its small and midsize LCD business as its main revenue source in the future because it expects to boost supplies for Apple's products and gain new orders for PCs, which would be generated through a tie-up with Intel.

If the number of orders from Apple turns flat, or tie-up talks with Intel do not conclude in the way Sharp hopes, the Japanese maker will lose important sales channels, making it difficult for the company to reconstruct its business.

Sharp needs to improve its financial structure with funds from Hon Hai and Intel while securing sales channels to turn itself around.

In July, Sharp began jointly operating its Sakai plant with Hon Hai, which resulted in stopping the deterioration in the earnings of its large LCD screen business for now.

(Oct. 7, 2012)

The following appears on

Sharp Corp. (6753), the Japanese electronics maker on course to post a second straight full-year loss, dropped to the lowest level in at least 38 years in Tokyo trading after Goldman Sachs Group Inc. cut its rating to sell.

Sharp slumped 15 percent to 151 yen, the lowest since at least 1974. The stock was the biggest loser on the benchmark Nikkei 225 (NKY) Stock Average, which fell 1.1 percent. Japanese markets were shut yesterday for a public holiday.


The maker of Aquos televisions may need to issue new stock to raise funds, eroding shareholder value, Goldman Sachs analysts led by Takashi Watanabe wrote in a report on Oct. 6. Goldman Sachs, which cut the stock’s rating from neutral, also reduced Sharp’s 12-month price estimate by 31 percent to 120 yen because of expectations that earnings per share will be diluted by about 50 percent with the new stock.

“Even assuming continued financial support from its banks, we are more convinced Sharp will need to issue fresh equity,” Goldman Sachs wrote in the report. Sharp’s equity-to-asset ratio “could deteriorate further if more inventory valuation losses or fixed-asset writedowns emerge,” the brokerage said.

Sharp isn’t in a position to comment on the views of Goldman Sachs, Miyuki Nakayama, a spokeswoman at the Japanese company, said by telephone today.

The company will need to book 106 billion yen ($1.4 billion) of unrecognized pension reserves next fiscal year, trimming the equity ratio to 4 percent at the end of March 2014, Goldman Sachs said. That compares with about 24 percent in the year ended March 31, the report showed.

Banks bailing out money-losing Sharp Corp. (6753) to the tune of $4.6 billion may increase their management oversight of the Japanese television maker to support its return to profit.

Mizuho Corporate Bank Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd. plan to send executives to Sharp, the Asahi newspaper reported yesterday. The lenders, based in Tokyo, are selecting the executives and plan to discuss the matter with the company, the newspaper reported, without saying how it obtained the information.

The maker of Aquos TVs secured 360 billion yen ($4.6 billion) of funding from Mizuho and Bank of Tokyo Mitsubishi- UFJ, it said Sept. 28, after submitting cost-cutting proposals to the banks earlier. Sharp has also been renegotiating a proposed stake sale to Taipei-based Foxconn Technology Group after widening its full-year loss forecast eightfold in August, triggering a slide in its share price. The talks may continue until March, Sharp said last month.

Miyuki Nakayama, a spokeswoman for Sharp, wasn’t immediately able to comment on the Asahi report.

Calls to Bank of Tokyo-Mitsubishi UFJ’s press officials and spokesman Shinya Matsumoto’s mobile phone were unanswered. A phone call to Mizuho Financial Group Inc. (8411) spokesman Masako Shiono’s office wasn’t answered.

The Asahi report didn’t say how many executives may be sent to Sharp or what posts they may take.

Sliding Shares

Sharp rose 4.8 percent to 153 yen at the close of Tokyo trading Oct. 12. The stock dropped 4.6 percent the previous day to 146 yen, the lowest level since November 1971, according to Nakayama, the company spokeswoman. The shares have slid 77 percent this year, the worst performer on Japan’s benchmark Nikkei 225 (NKY) Stock Average.

Sharp will get a 180 billion yen loan from Bank of Tokyo- Mitsubishi UFJ, a unit of Japan’s largest banking group by market value, and Mizuho Corporate, a unit of the No. 3 group, the company said Sept. 28. Another 180 billion yen in the form of a revolving credit facility due in June will also be extended to Japan’s biggest maker of liquid-crystal displays.

The TV maker may consider raising new funds, because it needs money for growth and to regain the trust of the market, a senior executive at the company said in Osaka, Japan, on Oct. 12. The executive declined to be identified, citing company policy.

The electronics company presented a revival package to its main banks that included cutting more than 10,000 jobs, or 18 percent of its workforce, and selling overseas plants as well as U.S. solar developer Recurrent Energy LLC, people with knowledge of the proposal said Sept. 26.

Sharp on Aug. 2 forecast a loss of 250 billion yen for the 12 months ending March 31.

Foxconn, led by billionaire Terry Gou, agreed in March to invest 67 billion yen for a 9.9 percent stake in Sharp at 550 yen a share. Under the agreement, the transaction was to be completed by March 2013. Sharp turned to Foxconn, whose Hon Hai Precision Industry Co. unit makes Apple Inc. iPads, in an attempt to restructure its money-losing LCD business.

To contact the reporter on this story: Tsuyoshi Inajima in Tokyo at

To contact the editor responsible for this story: Jim McDonald at
Japan’s biggest banks are spending the least amount to cover losses on bad loans this century. That could change as they step up lending to the nation’s ailing electronics companies including Sharp Corp. (6753)

The average ratio of reserves for delinquent debt at 84 lenders on the Topix Banks Index (TPNBNK) has dropped to 1.4 percent of total loans, the lowest in at least 12 years, according to data compiled by Bloomberg based on the latest filings. That’s less than half the level in 2000, when the industry was emerging from a financial crisis, and is smaller than the 1.85 percent average for 24 U.S. lenders on the KBW Bank Index. (BKX)

Banks including Mizuho Financial Group Inc. (8411) are lending to non-investment grade companies such as Sharp to widen record-low net interest margins after cleaning up bad debts that peaked at 43 trillion yen ($542 billion) in 2002. The danger is that borrowers will fail to turn that credit into profit, boosting default risk and eroding bank earnings already under pressure from losses on their 16.2 trillion yen of stock holdings.

“The severe environment surrounding the electronics industry could increase banks’ credit costs to some extent,” said Takayuki Atake, chief credit analyst at SMBC Nikko Securities Inc. in Tokyo. “Impairment losses from stocks, in particular of electronics-related equities, will have a big impact on the earnings of banks like Mizuho.”

Economic Slowdown

Japanese electronics makers including Sharp and Panasonic Corp. are reeling from increased global competition, slowing economic growth and a yen rate that’s 5 percent from a postwar high against the dollar. The government has downgraded its view of the world’s third-largest economy for three straight months as exports weaken. Overseas shipments fell more than economists forecast last month, government data showed today.

Sharp secured 360 billion yen of funding from units of Mizuho and Mitsubishi UFJ Financial Group Inc. (8306) last month after the television manufacturer pledged to cut more than 10,000 jobs and sell plants. Panasonic, which is trying to recover from a record annual loss, said Oct. 16 that it got 600 billion yen in credit lines from lenders including Sumitomo Mitsui Banking Corp. and Bank of Tokyo-Mitsubishi UFJ Ltd.

Mizuho, Sumitomo Mitsui and Bank of Tokyo-Mitsubishi are also lending about 1.5 trillion yen to Softbank Corp. (9984) for the wireless operator’s $20 billion bid to buy control of Sprint Nextel Corp. in the biggest publicly announced outbound acquisition by a Japanese company since at least 2000. Moody’s Investors Service and Standard & Poor’s have said they may cut Softbank’s credit rating because of the deal. Moody’s rates Japan’s third-biggest carrier one level above junk and S&P has it at the second-lowest investment grade.

Impact Abroad

“Domestic factors alone won’t raise banks’ credit costs,” Japanese Bankers Association Chairman Yasuhiro Sato said at a news conference on Oct. 18. “However, we must closely watch any impact on Japanese machine-parts makers and smaller businesses from any adverse effects abroad,” said Sato, who is also chief executive officer of Mizuho.

The bursting of Japan’s real estate and stock bubble more than 20 years ago led to the collapse of Yamaichi Securities Co. and Hokkaido Takushoku Bank and prompted other lenders ridden with bad debts to form the three so-called megabanks that exist today. Non-performing loans reached a record 43.2 trillion yen as of March 2002, according to Financial Services Agency data.

Banks’ provisions for bad debts peaked at 15.5 trillion yen in May 2000, Bank of Japan figures show. They have pared reserves since then, setting aside 4.95 trillion yen as of August, close to a record-low 4.85 trillion yen in March.

Shinsei Sale

Elsewhere in the domestic credit markets, Shinsei Bank Ltd. sold 6.4 billion yen of 10-year subordinated bonds. The Japanese lender partly owned by J. Christopher Flowers priced the notes to yield 4 percent for the first five years, after which the charge switches to 3.61 percentage points more than the five- year yen swap rate, according to data compiled by Bloomberg.

Sekisui House Ltd., the Osaka, Japan-based home builder, hired banks for an offering of about 20 billion yen of five-year notes, according to a statement from Mitsubishi UFJ Morgan Stanley Securities Co., which is managing the deal together with Mizuho and SMBC Nikko.

Japan’s corporate bonds have handed investors a 1.4 percent return this year, compared with the 1.7 percent gain for the nation’s sovereign debt, according to Bank of America Merrill Lynch data. Company notes worldwide have gained 9.8 percent, according to the data.

Default Risk

The Markit iTraxx Japan index of credit-default swaps for 50 companies declined 15 basis points last week to 208 on Oct. 19, after falling to the lowest since Sept. 19 the previous day, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market. A decrease in the contracts signals improving perceptions of creditworthiness, while an increase suggests the opposite.

Yields on Japan’s benchmark 10-year government bonds gained 1 1/2 basis points compared with Oct. 12 to 0.78 percent today. The securities yielded 98 basis points less than similar maturity U.S. Treasuries, versus 114 basis points a year earlier.

The yen traded at 79.33 per dollar at 9:54 a.m. in Tokyo, after weakening 1.1 percent last week. The Japanese currency strengthened to a post-World War II record of 75.35 on Oct. 31.

Exports Fall

Japan’s exports slid 10.3 percent in September from a year earlier, the Finance Ministry said in Tokyo today. Economists expected a 9.9 percent export decline, according to median forecasts in surveys by Bloomberg News. A rising yen erodes exporter profits by making their products more expensive abroad and reducing the value of repatriated earnings.

Japanese lenders are also vulnerable to losses from stocks they hold as part of a culture of companies taking stakes in each other to cement ties. Banks have been sluggish in paring their shares of allied enterprises, according to Naoko Nemoto, a director of financial institutions ratings at S&P in Tokyo.

“The slow pace of unwinding cross-shareholding is keeping the risk of equity volatility intact for megabanks,” Nemoto said. Stricter bank capital rules developed since the global financial crisis “will perhaps prompt them to accelerate the pace of cutting allied shareholdings to mitigate the risk.”

Stock Loss

Mizuho, the nation’s third-biggest bank by market value, said on Oct. 5 that it will book 173.7 billion yen in losses relating to declining values of its domestic stock holdings in the three months ended Sept. 30. Mizuho’s corporate lending unit has shares in Sharp, which has tumbled 76 percent this year, the worst performance among 1,672 companies on the Topix Index.

“Declines in Japanese electric utility and electrical appliance manufacturer stocks fueled the losses, and we expect the other megabanks to experience similar results,” Moody’s wrote on Oct. 11. The portfolio losses are credit negative for the three banks, it said.

Japanese lenders’ stock holdings fell to 16.2 trillion yen in August from 17.5 trillion yen a year earlier and a peak of 47.9 trillion yen in October 1997, Bank of Japan data show.

The emergency loans to Sharp signal that “banks in general aren’t easily able to cut transactions with big corporate clients even if their creditworthiness deteriorates,” said Shinichi Ina, a Tokyo-based analyst at UBS AG. “Blue-chip companies can suddenly get in trouble due to changes in the business environment, and banks still rely on domestic lending as their main source of revenue.”

To contact the reporters on this story: Shigeru Sato in Tokyo at; Takako Taniguchi in Tokyo at

To contact the editor responsible for this story: Chitra Somayaji at
(Reuters) - Sharp Corp (6753.T), the fourth largest television manufacturer in the world, may have suffered a group net loss of around 400 billion yen ($5.01 billion) in the April-September half due to restructuring costs and valuation losses on inventory, the Nikkei said.

The loss is nearly double the 210 billion yen ($2.63 billion) the company had projected in August, the Japanese daily said.

Sharp, which has been hit by a steep decline in demand for LCD televisions and panels in recent times, had projected a 250 billion yen ($3.13 billion) group net loss for the full year. It may have to widen this projection on account of the worse-than-expected half-year results, the daily said.

The company, which reported an interim net loss of 39.8 billion yen ($499 million) last year, decided to cut 10,000 jobs in September to secure loans, the financial daily said.

Sharp is looking to generate an operating profit in the October-March half and return to the black in the full year through March 2014, the Nikkei reported.

($1 = 79.8250 Japanese yen)

(Reporting by Avik Das in Bangalore; Editing by Roshni Menon)
Sharp Corp. (6753), Japan’s biggest maker of liquid-crystal displays, fell the most in two weeks in Tokyo trading after the Nikkei newspaper said the company may post a 400 billion-yen ($5 billion) loss for the first half.

The shares dropped as much as 6.6 percent to 156 yen, headed for the biggest decline since Oct. 9, and traded at 159 yen as of 9:54 a.m. Sharp said Aug. 2 it may post a 210 billion- yen net loss for the six months ended Sept. 30.

Sharp is cutting jobs and selling factories, and has turned to lenders to refinance debt as it heads for a second straight year of losses amid slumping demand for TVs and a strong yen that’s eroding overseas earnings. The company may take 200 billion yen in charges for losses on LCD panels and other inventory, a writedown of deferred tax assets and restructuring costs, the Nikkei said, without citing anyone.

“A net loss that big may raise concerns about the company’s cash position,” Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo, said of the report. “We may have to watch out for how much cash is left at the company at the end of the first half, and whether bridge loans from banks will be enough to refinance commercial papers.”

Sharp will probably revise its earnings forecasts for the year ending March 31, the Nikkei said. The company’s sales and operating loss for the first half may be in line with current company forecasts, the report said.

Job Cuts

Atsushi Yoshida, a spokesman for Sharp, said the company isn’t the source of report. The Osaka-based company is scheduled to report earnings on Nov. 1.

The average of four analyst estimates compiled by Bloomberg is for a 215 billion-yen first-half net loss.

Sharp is cutting more than 10,000 jobs and selling overseas plants as well as U.S. solar developer Recurrent Energy LLC in an attempt to return to profit next fiscal year, people with knowledge of the plans said Sept. 26. The company presented a revival package to lenders that included asset sales and job cuts as it sought 360 billion yen in loans, the people said.

The maker of Aquos TVs turned to lenders for support as it struggled to refinance debt after Standard & Poor’s and Moody’s Investors Service cut its credit ratings to junk.

The company had 706 billion yen of short-term debt maturing within 12 months, according to its latest quarterly financial statement. Sharp’s cash and near-cash stood at 218 billion yen at the time.

Foxconn Investment

The electronics maker has been renegotiating terms for a proposed stake sale to Taipei-based Foxconn Technology Group after widening its full-year loss forecast eightfold in August, triggering a slide in its share price. Foxconn agreed in March to invest 67 billion yen for a 9.9 percent stake in Sharp at 550 yen a share.

Sharp aims to return to profit next fiscal year with the help of job cuts and cost reductions, President Takashi Okuda said Sept. 14. The company is planning to reduce wages, managers’ salaries and bonuses to lower costs by 14 billion yen, it said earlier this month.

To contact the reporter on this story: Mariko Yasu in Tokyo at
706 billion yen of short term debt is due in 12 months, this is over $billion US dollars!

"And high on Japan Inc's list of worries this earnings season is what Canon and others are referring to as "China risk".

Almost half of Japanese manufacturers expect to see lower sales in the current fiscal year due to the spike in tensions between Asia's two largest economies, while nearly one-quarter said they were considering delaying or reducing planned investment in China, according to a Reuters Corporate Survey released on Wednesday."

Japanese companies are now cutting their full year earning due to the China Risk and the deepening debt crisis in europe.
Nov 01, Sharp Corp has now publicly announced it own doubts about it's ability to continue as a Corporation without radical corporate change and new investors.

(Reuters) - Struggling Japanese TV maker Sharp Corp warned it might not be able to survive on its own, as it almost doubled its full-year net loss forecast to $5.6 billion, and said it was considering alliances with other companies.

In a statement, the company said it booked massive second-quarter losses and is seeing "serious negative operating cash flow." "This raises serious doubts about (our ability) to continue as a going concern," it said, adding it was taking steps, from pay cuts and asset sales to voluntary redundancies, to generate cash flow.
Originally posted by SalesServiceGuy:
Nov 01, Sharp Corp has now publicly announced it own doubts about it's ability to continue as a Corporation without radical corporate change and new investors.

(Reuters) - Struggling Japanese TV maker Sharp Corp warned it might not be able to survive on its own, as it almost doubled its full-year net loss forecast to $5.6 billion, and said it was considering alliances with other companies.

In a statement, the company said it booked massive second-quarter losses and is seeing "serious negative operating cash flow." "This raises serious doubts about (our ability) to continue as a going concern," it said, adding it was taking steps, from pay cuts and asset sales to voluntary redundancies, to generate cash flow.

Its about time they admitted to their customers and future customers and shareholders the truth. Instead of this ongoing spin from SIICA. Something that we have known all along.

I'm not certain I beleive the story about its copier division being profitable either. They dont sell enough of them.
Nov 2 (Reuters) - Shares of Japan's Sharp Corp fell and Fitch Ratings downgraded its debt to junk status on Friday, a day after it warned of a $5.6 billion net loss for the year and said it might not be able to survive on its own.

"Effectively shunned by the debt capital markets because of its massive losses and falling market share"

"Worries about its cash liquidity have mounted in the credit markets, where the cost of insuring Sharp's debt has jumped more than 30-fold since the start of the year and is now more than 10 times the cost for Sony and Panasonic."
Sharp Corp. may turn to the last resort of Japanese companies facing potential bankruptcy – the government. With 200 billion yen ($2.5 billion) of convertible bonds maturing in 2013, Sharp may have to ask the state Enterprise Turnaround Initiative Corp. or Innovation Network Corp. of Japan for money, said Fumiaki Sato, co-founder of Sangyo Sosei Advisory Inc., a turnaround advisory firm in Tokyo.

"Sharp, the world’s worst performing major stock"

“Fitch does not foresee any meaningful operational turnaround in the company’s core business over the short- to medium-term,” the ratings company said."
The following was released by the rating agency)

SEOUL/SYDNEY/SINGAPORE, November 12 (Fitch) This week Matt Jamieson spoke with Alvin Lim, Fitch's TMT sector analyst based in Seoul, about the recent downgrade of Sharp Corporation ('B-'/RWN) and his views on Panasonic Corporation's ('BBB-'/Negative) latest financial results.

Mr Jamieson is Head of APAC Research in Fitch's Corporate Ratings Group. Alvin explains that very weak liquidity and substantial operating losses drove the Sharp downgrade. Panasonic's EBIT margins have recently improved to stave off a rating action at this juncture.

However a failure to generate higher cash flow could result in a downgrade to speculative grade within the next 12 months.

Matt: Fitch recently downgraded Sharp by six notches from 'BBB-' to 'B-', a level which indicates the presence of a material default risk. Can you explain the main factors behind such a dramatic downgrade?

Alvin: By way of background let me explain that Fitch downgraded Sharp's rating to the lowest investment grade level of 'BBB-' in December 2011 and changed the Outlook to Negative in February 2012 due to poor operational performance, particularly at its core LCD TV and panel businesses which make up over 60% of the company's total revenue. Further, in September 2012 Fitch placed Sharp's ratings on Negative Watch, based on escalating liquidity and operating issues. Now in early November 2012 Sharp's financial results for H1FY13 revealed a negative EBIT margin of 15%, that the company continues to hemorrhage cash and it is facing a severe liquidity crisis. Cash on hand of JPY221bn is significantly short of the JPY898bn of debt maturing within the next 12 months, and there is a risk that continued support from its creditor banks may not be forthcoming. Hence in light of the acute liquidity risk and substantial operating losses, we downgraded the ratings to the bottom of the single 'B' category, and maintained the Negative Watch.

Matt: As part of the rationale for the downgrade, Fitch also commented that it doesn't expect any meaningful operational turnaround in the company's core business over the short-to-medium term. Can you explain the basis for such a pessimistic outlook?

Alvin: Firstly their position in the global TV market continues to deteriorate, the gap is widening with Korean TV makers, and this trend is not likely to reverse any time soon. For the past two to three years the company focused on producing and driving the market for super large-sized TVs; however, demand has been well below expectations and they have had to discount prices to generate sales. This, in turn, has weakened the company's panel business, especially at its 10th generation facility in Osaka. Secondly, their technology development remains a step behind that of Korean manufacturers. Supposedly Sharp had a good reputation for technology for small- and medium-sized panels, but the company recently was not able to mass-produce them at an acceptable quality and in a timely manner to supply key clients, including major mobile device makers. While the quality or the yield rate of its TV panels may improve, contribution from this area remains uncertain. Thirdly, the high yen continues to work against the company. While there is some expectation that the Japanese yen could depreciate, so long as the USD/JPY remains at around the 80 mark, price competiveness and profitability will continue to erode.

Matt: Panasonic also reported a huge net loss for H1FY13. What is Fitch's view of Panasonic compared with Sharp?

Alvin: Firstly, let me explain that we downgraded Panasonic's rating to 'BBB-'/Negative in February 2012 due to deteriorating operating and financial results. At the time we expected that the company would be taking on substantial restructuring initiatives to streamline its cost structure. Now, while it is true that in Q2 FY13 Panasonic reported a substantial net loss, this was largely due to restructuring charges at the non-operating level. Most of these restructuring charges were non-cash items, such as impairment charges and income tax provisions after writing off deferred tax assets. Importantly at the operating or EBIT level, the company's performance actually improved during the first six months of FY13 with an EBIT margin of 2.4% versus just 0.1% in same period last year.

Matt: What will it take to downgrade or stabilise Panasonic's ratings then?

Alvin: Panasonic's operations are slowly improving, and the company's CEO is clearly focused on restructuring. However, the company's cash flow from operations (CFO) remains very low, and free cash flow (FCF) generation remains negative. Therefore, Fitch will focus not only on whether the company can further improve its operating margins, but also if this can flow through to higher CFO generation and positive FCF in the short-to medium-term. If the company is not able to achieve this, its ratings are likely to be downgraded to speculative grade.

Matt: Finally, why are Samsung Electronics ('A+'/Stable) and LG Electronics ('BBB'/Negative) significantly more profitable than the Japanese technology names?

Alvin: In short it is because the Koreans have better price competitiveness, product quality and technology. While the overall global market for key electronics products such as flat panel TVs has slowed down, the Koreans are taking a significantly large slice of the market compared with two to three years ago. Since their TVs are selling well, this enables their component panel divisions to achieve necessary economies of scale. This is particularly true for Samsung Electronics, as its high profitability and cash flow generation enable the company to continue investing heavily into R&D and capex so that it remains at the forefront of the technology curve.
I spoke to an old friend who's been a dealer rep for decades, literaly, who is with Sharp (one of five nationwide). He indicated that dealers are still signing up and that fellow Sharp employees want Kyocera-Mita to buy up the division.
I feel that like what the US Government did for the US Auto industry, Japan will do for their panel industry. Japan cannot lose to Korea in the panel field like it has in the automobile field.
Apple has sunk a bunch of it's vast coroprate treasure into Sharp recently to hold onto their suppliers.
Wonder how much government assistance Sammy gets from Korea? Like it or not, government funding (ownership) of private enterprise is the only way HUGE multi-national manufacturers are going to be able to survive in this worldwide economic slowdown - the big question is . . . Is it the new-Normal?
Nov 15 (Basis Point) - Hon Hai Precision Industry Co Ltd's chairman is lining up a T$19 billion ($654 million) loan for his purchase of a stake in Sharp's 10th-generation liquid crystal display (LCD) plant, said sources with knowledge of the matter.

Chairman Terry Guo is providing a personal guarantee on the loan, the sources said, who declined to be identified as they were not authorised to speak to the media.

A Taiwan investment company owned by Guo will be the borrower on the financing, which is secured and has a tenor of less than five years, said one of the sources.

Earlier this year, Guo agreed to pay a total of 66 billion yen ($817 million) for 1.32 million shares of Sharp Display Products Corp (SDP), representing 36 percent of SDP, which controls the world's only 10th-generation LCD plant in Sakai city, Osaka.

Apart from Guo's personal investment in SDP, Sharp has also agreed with Hon Hai to issue new shares to the group through third-party allotment, according to an announcement by Sharp on March 27. There have been no announcements on the progress of the matter, although Taiwan's local media reported the two parties said they would make a final decision by March 2013.

Reuters reported on Wednesday that US-based Intel Corp and Qualcomm Inc are in talks to jointly invest about 30 billion yen in the debt-stricken Japanese consumer electronics maker. Sharp may reach an agreement as early as the end of this month with Qualcomm, according to the report.

Osaka-based Sharp, which has lost three-quarters of its market value so far in 2012, nearly doubled its forecast full-year net loss to 450 billion yen earlier this month after booking a $1.1 billion restructuring charge in July-September.

In September, Sharp received a guarantee for 360 billion yen in loans from its two main lenders, Bank of Tokyo-Mitsubishi UFJ and Mizuho Corporate Bank.

The loans are enough to sustain the company through its next financial year to March 2014, which includes the redemption of 200 billion yen in convertible bonds next September, Sharp's Chief Financial Officer Tetsuo Onishi said in September.
Sharp Update!!

Intel may take a 30 billion yen investment in Sharp by the end of the month, the 30 billion yen is less than 10% of what Sharp expects to lose this year.

There was also a report that Qualcom may also do something.

In another report Ming the Merciless aka Terry Guo is providing a personal guarantee for HonHai to move foward with his purchase of Sharp's 10th gen LCD plant. It's reported for about 19 billion yen. Keep in mind that Sharp is expected to lose 450 billion yen this year. Thus that's 5.6 billion US dollars!

Money from Intel and Hon Hai is only 49 billion yen.

Another report states that Sharp will raise production at it's Kameyama No. 2plant to near 100%, this plant produces the IGZO screens for Apple's Ipad tablet.

Sharp is banking on IGZO as the revival of it's fortunes.

Funny, nothing about MFP's to help get Sharp out of the mess it's in.
Sharp to Book $311 Million Charge as 2,960 Workers Accept Buyout

Sharp Corp. (6753), the world’s worst- performing major stock, will book a 25.3 billion yen ($311 million) one-time charge this quarter to eliminate jobs.

The charge, for 2,960 workers who accepted buyout offers, is already factored into earnings forecasts for the year ending March 31, Osaka, Japan-based Sharp said in a statement today. Sharp, which sought about 2,000 voluntary retirements, closed the offer Nov. 9, it said.

Japan’s biggest liquid-crystal display maker said Nov. 1 it may post a record net loss of 450 billion yen this fiscal year, compared with its earlier projection for a 250 billion yen deficit. Faced with falling demand for TVs, a stronger yen and competition from Samsung Electronics Co. and Apple Inc., Japanese electronics makers including Sharp, Sony Corp. and Panasonic Corp. (6752) have resorted to closing factories, eliminating jobs and cutting costs to revive profit.

Sharp fell 1.7 percent to 172 yen in Tokyo trading today, extending its loss this year to 74 percent, the worst performer among more than 1,600 companies in the MSCI World Index (MXWO) of developed nations.

The company’s turnaround plan includes seeking voluntary retirements, cutting salaries, selling assets and reducing capital investments, Sharp said Nov. 1.

To contact the reporter on this story: Mariko Yasu in Tokyo at

To contact the editor responsible for this story: Michael Tighe at
Sharp's early retirement program becomes oversubscribed

Sharp's earlier retirement program aimed to let go 2,000 Japanese staff, and yet 3,000 have taken the firm up on its offer.

The electronics giant has been in financial trouble for some time now. Knowing this, what member of staff -- who potentially is at an age that gaining another job easily would be difficult -- wouldn't take the opportunity to leave the ailing firm and be financially compensated?

The voluntary retirement program, announced in August, would give staff at the firm and its main subsidies in Japan the option to stop work voluntarily. Sharp's original estimates suggested that roughly 2,000 employees would be induced to take voluntary retirement.

However, the company has had to shorten the application deadline by a week as the scheme quickly became oversubscribed. In total, 2,960 Sharp employees have taken the deal, each of whom will retire on December 15 2012.

The expense, 25.3 billion yen ($3.11bn) will be recorded as an extraordinary loss for the third quarter ending March 31 2013.

Reports suggest that the consumer electronics firm is in talks with Qualcomm and Intel in order to receive a joint investment worth $378 million dollars. The firm has doubled its full-year net loss forecast to $5.7 billion, and says that it has "serious doubts" about survival.
Sharp Corp has agreed to sell three of its overseas factories to Foxconn Technology Group (富士康科技集團) for about ¥55 billion (US$667 million), Sankei newspaper said, citing unnamed sources.

The television assembly plants are located in Mexico, Malaysia and Nanjing, China, and sale procedures will start as early as this month, Sankei reported.

Sharp said last month there was “material doubt” about its ability to survive after forecasting a record ¥450 billion, full-year loss on falling demand for its display panels.

Sharp, the maker of Aquos televisions, is selling assets and seeking investment as it cuts salaries and jobs, and offers voluntary retirements as a part of a turnaround plan.
In July, Sharp sold a stake in an LCD factory in Sakai, central Japan, to Foxconn, who will jointly operate the 10th-generation facility, the industry’s most advanced.

Sharp’s talks with Foxconn over a capital tie-up may continue beyond a March deadline, Sharp said last month. Earlier this year, the two reached a preliminary agreement on Foxconn buying a 9.9 percent stake in the Japanese electronics maker for ¥550 a share, or ¥67 billion.

Negotiations on a final price have yet to be completed as Sharp’s market value declined almost 75 percent this year, to close yesterday at ¥172 per share.

Sharp president Takashi Okuda said on Nov. 1 that the company is considering various partnership options. Kyodo News said on Nov. 13 that Sharp was in final talks with Intel Corp to receive an investment of as much as ¥40 billion, while the Wall Street Journal said on Tuesday that the company is in talks with Dell Inc to arrange a capital investment of US$240 million.

Sharp hemorrhaged ¥103 billion in cash from operations in the first half of the year. The company may turn to the Japanese government for a bailout, analysts said last month.
Taipei, Dec. 2 (CNA) Hon Hai Precision Industry Co., the world's largest contract electronics maker, declined Sunday to comment on a Japanese newspaper report that said Sharp has agreed to sell its three overseas TV factories to Hon Hai.

The Sankei Shimbun cited anonymous sources that it claimed are familiar with the matter as saying that Sharp has reached a 55 billion yen (US$1.83 billion) deal with Hon Hai to sell its three factories in Mexico, China and Malaysia.

According to the report, Hon Hai is most interested in Sharp's Mexico plant.

In late November, Hon Hai also declined to comment on a Wall Street Journal report that said Sharp is open to Hon Hai's possible acquisition of a stake in the Japanese firm.

Sharp owns four overseas TV plants, but the supposed Hon Hai transaction will not include its factory in Poland, the report said.

Since this year, the market capitalization of Sharp has shrunk by 75 percent.

It has suffered a lack of funds this year, listing US$1.1 billion-worth of restructuring charges in the third quarter. Sharp last month almost doubled its full-year net loss forecast to 450 billion yen.

Meanwhile, Hon Hai has recently launched 60-inch LED TVs that use flat panels produced at Sharp's 10th-generation plant located in western Japan, in which Hon Hai Chairman Terry Gou holds a 46.5 percent stake.

(By Chung Jung-feng and Hanna Liu)
(Reuters) - Sharp Corp and Qualcomm Inc reached a deal to jointly develop an energy-efficient LCD panel for smartphones using the Japanese company's display technology, the Nikkei reported.

Sharp will provide its indium-gallium-zinc oxide technology, which greatly reduces a panel's power use. Full details are expected to be announced as early as Tuesday, the daily said.

Sharp will receive 5 billion yen ($61 million) from the U.S. chipmaker by the end of this year through a private placement of new shares. Sharp will receive an additional 5 billion yen or so once sufficient progress has been made, the newspaper reported.

A 10 billion yen investment would give Qualcomm a roughly 5 percent stake in Sharp based on Sharp's Monday closing price, the daily noted.

Qualcomm and Sharp representatives were not immediately available for comment.

Sharp, which pioneered LCD technology, has lost three-quarters of its market value this year following massive losses and falling market share.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Sriraj Kalluvila)
TOKYO – Qualcomm will invest $120 million in the struggling Japanese electronics giant Sharp, throwing a fresh lifeline to the company after Sharp issued a dire warning last month about its ability to keep operating.

In a statement, Sharp, the maker of Aquos televisions, said it would issue 4.9 billion yen ($59.7 million) worth of new shares to Qualcomm at 164 yen a share, a slight discount to the company’s closing share price on Tuesday. Sharp said it had secured a second investment of up to 5 billion yen from Qualcomm, which is based in San Diego.

The initial investment is likely to make Qualcomm Sharp’s biggest shareholder, with a 2.65 percent stake, Reuters said. According to the statement, the two manufacturers will develop liquid crystal displays based on a new technology that Sharp has touted called IGZO, which the company says is more energy efficient, offers crisper resolution and allows for more sensitive touch screens.

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Documents: Qualcomm news release
Sharp, based in Osaka, Japan, has been hurt by heavy losses in its flat-panel display business, which has been pummeled by intense competition from the likes of Samsung Electronics of South Korea.

The company’s woes, called the “Sharp Shock” in Japan, have underscored a wider decline of Japanese consumer electronics companies in the face of a painfully strong yen, a plunge in prices from cutthroat global competition and a dearth of breakthrough ideas.

Sharp announced this year that it planned to accept a 67 billion yen investment from Taiwan’s Foxconn Technology, but a deal has become less certain as its financial woes have deepened and its share price has plummeted.

Sharp, also a supplier of screens for Apple products, has eliminated jobs for the first time in six decades and put up its corporate headquarters as collateral to secure a 360 billion yen bank bailout in September.

Despite the bailout, Sharp said last month that there was “material doubt” over its ability to survive after forecasting a record 450 billion yen loss for the year through March, though it vowed to take steps against such an outcome. Sharp’s president, Takashi Okuda, said at the time that the company was exploring partnerships.

Since then, news reports had linked Sharp with technology companies including Dell, Intel, Hewlett-Packard, Microsoft, Google and Apple. Sharp denied those reports, saying nothing had been decided.

Shares in Sharp gained 1.2 percent, to 174 yen, in Tokyo on Tuesday after the Nikkei business daily reported details of the deal. Sharp’s stock has lost three-quarters of its value this year.
Hon Hai's Gou says talks on investment in Sharp still on: paper

(Reuters) - Qualcomm's tie-up with Sharp Corp will not affect Hon Hai Precision's talks with the Japanese firm to become its biggest shareholder and the deadline to reach a decision by next March still stands, a Taiwan newspaper reported on Wednesday, quoting Hon Hai's chairman.

Terry Gou, chairman of Hon Hai Precision Industry, a major supplier of parts to Apple Inc, was mentioned by the United Evening News as saying the Taiwan firm's talks to get an up to 9.9 percent stake will not change even though the cash injection from Qualcomm will give the U.S. chipmaker a 5 percent stake in Sharp.

Gou reiterated that he expects to reach a decision with Sharp before March 2013, the Chinese-language newspaper reported.

Sharp's talks with Hon Hai to renegotiate its investment have stalled in the past few months as the Japanese company's losses have mounted.

A Hon Hai executive, when contacted by Reuters on Wednesday, said that the talks are still on and the price Hon Hai will pay Sharp was yet to be agreed on by both companies.

(Reporting by Faith Hung; Editing by Muralikumar Anantharaman)
Sharp has mortgaged nearly all its properties to secure a $4.6 billion bailout from Japanese banks and so has few assets to offer in a grand garage sale.

Instead, it's selling part of the garage.

Qualcomm has agreed to buy a 5 percent stake in Sharp, making it the largest shareholder. Hon Hai, which earlier this year agreed to invest in Sharp - before its stock slumped in the wake of record losses - has said it remains interested in taking a stake.

"Whatever they can get to get through this fiscal period by scaling down their operation is a critical step for them to remain afloat," said Fitch's Lim.
Sharp Corp. (6753), Japan’s worst- performing major stock, rose the most in at least 38 years in Tokyo trading as concerns the company can’t pay its debts eased.

Sharp surged as much as 24 percent, the biggest gain since at least 1974, and traded at 325 yen at the 11:30 a.m. break, heading for the highest close since July 13. Sharp has declined 52 percent this year, the biggest drop on Japan’s benchmark Nikkei 225 Stock Average (NKY), which has gained 18 percent.

The TV maker, which said last month there was “material doubt” about its ability to survive, reached an agreement this month to sell as much as 9.9 billion yen ($118 million) of shares to San Diego-based Qualcomm Inc. (QCOM) Sharp turned to the biggest maker of mobile-phone chips after failing to get a planned 67 billion-yen investment from Taiwan’s Foxconn Technology Group and hemorrhaging 103 billion yen in cash from operations in the fiscal first half.

“There was an investment from Qualcomm and a report on getting more banks for its lending plan,” Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo, said today. “That’s clearing some of the concerns over Sharp’s ability to repay debt. It seems more attention is focused on possible earnings improvements than on bankruptcy risks.”

Sharp warned Nov. 1 about its ability to survive after forecasting a record 450 billion-yen, full-year loss because of sluggish demand for its panels. The company posted a record 376 billion-yen loss in the fiscal year ended March 31.

Cutting Jobs
Japan’s largest liquid-crystal-display maker has 395 billion yen of notes outstanding, including 200 billion yen of convertible bonds due September, according to data compiled by Bloomberg. The bonds were quoted at 77.15 yen per 100 yen face value as of 11:16 a.m. in Tokyo today, the highest level since Aug. 30, according to Tokyo Stock Exchange prices.

Resona Holdings Inc. (8308) will join Japanese lenders offering 360 billion yen of emergency loans to Sharp, three bank officials with knowledge of the matter said Dec. 11.

Sharp, which is cutting more than 10,000 jobs, secured 180 billion yen in collateralized loans through its main lenders Mizuho Corporate Bank Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd., it said Sept. 28. Osaka-based Sharp also got a 180 billion-yen credit facility that expires at the end of June.

Fitch Ratings cut Sharp’s credit rating to junk last month, saying it doesn’t foresee “any meaningful operational turnaround in the company’s core business over the short- to medium term.”

To contact the reporter on this story: Mariko Yasu in Tokyo at

To contact the editor responsible for this story: Michael Tighe at
BrightWire, a business-to-business resource for portfolio managers, is reporting this morning that a report published by Tokyo's daily newspaper Yomiuri Shimbun is stating that Sharp has officially ended small to mid-sized IGZO LCD panel supply to Apple due to low profitability. At this time it's difficult to assess whether their public reasoning is factual or just a face saving measure due to Apple dumping the IGZO display due to production delays.

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