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Sharp's plan to sell Nanjing plant to Hon Hai on hold:


TOKYO/TAIPEI: Struggling Japanese TV maker Sharp's plan to sell its Nanjing plant in China to Taiwan's Hon Hai Precision Industry has been frozen and may not materialise, a source familiar with the matter said on Thursday.

Sharp, which supplies screens to Apple for its latest iPhone, considers selling its Mexican plant to Hon Hai to be more important, and talks to sell the Nanjing plant, which assembles large-size liquid crystal display TVs, may take time, said the source, who was not authorised to speak to the media.

Both Sharp and Hon Hai declined to comment. Earlier this month, Sharp struck a deal with Qualcomm Inc for the U.S. chipmaker to invest as much as $120 million to help the Japanese firm stay afloat, and to jointly develop new power-saving screens.

That deal has helped soften banks' stance towards Sharp, allowing it to make stronger demands of Hon Hai, said a source at one of Sharp's suppliers.

Sharp had been expected to make Hon Hai its biggest shareholder, adding to an earlier agreement to sell the Taiwanese company a stake in its advanced television LCD panel in Sakai, western Japan.

That agreement has stalled as Sharp's losses have mounted, and its executives remain opposed to giving Hon Hai managerial say.

Shares in Sharp were down 1.9 percent against a 1.3 percent rise in Tokyo's electric machinery index.
TOKYO – Japanese electronics giant Sharp plans to abandon its joint venture with Italy’s Enel to produce solar panels, Japan’s Kyodo news agency reported Monday.

The Osaka-based firm, now in the midst of a restructuring aimed at returning to profit, may sell its entire stake in the 3Sun operation in Sicily.

Sharp, Enel and Swiss company STMicroelectronics founded the solar venture in June 2010.

The Sicilian manufacturing plant, built at a cost of 49 million euros ($64.6 million), is one of the largest of its kind in Europe.

Sharp management wants to concentrate on Japan and the booming Asian market, Kyodo said, adding that the Japanese company is also contemplating the sale of half of its stake in another European solar-panel factory co-owned with Enel.

Sharp’s strategy calls for getting out of solar-cell and -panel manufacturing and distribution in Europe and the United States by March 31, the end of Japan’s 2013 fiscal year, Kyodo said.

The sprawling Japanese firm plans to eliminate some 10,000 jobs in its quest to return to profitability after registering a record net loss of 3.3 billion euros ($4.35 billion) in 2011. EFE
Jan. 1st 2012

Embattled Japanese electronics firm Sharp is considering making a public share offering worth more than 100 billion yen ($1.15 billion) early this year, a report said Tuesday.
The public offering could take place in the spring with the firm hoping to use the funds to strengthen its mainstay liquid crystal display (LCD) business and improve its creditworthiness, the Yomiuri Shimbun newspaper said.

Sharp has started talks with major creditor banks and wants to include the capital increase scheme in a mid-term business plan to be announced as early as February, the mass-circulation daily said without naming its sources.

The cash-strapped company said in December it had struck a 9.9-billion-yen capital injection deal with US-based chipmaker Qualcomm as it moves to repair its tattered balance sheet.

The Qualcomm deal will see the pair jointly develop energy-efficient LCD panels for smartphones using the Japanese firm's technology, with the US company initially getting about 2.64 percent of Sharp's stock.

Japan's battered electronics sector has suffered from a myriad of problems including a high yen, slowing demand in key export markets, fierce overseas competition and strategic mistakes that left its finances in ruins.

Sharp has suffered a series of credit rating downgrades and warned it expects to lose about $5.6 billion in the fiscal year to March 2013.

The Osaka-based maker of Aquos-brand electronics has announced thousands of job losses while cutting wages for employees from the factory floor to the boardroom and selling real estate to shore up its balance sheet.

Sharp said last year it had reached a capital injection deal worth about $800 million with Taiwan's Hon Hai Precision, which makes Apple gadgets in China, but the deal stalled as Sharp's share price nosedived.
(Reuters) - Sharp Corp had a better-than-expected operating profit for October-December, its top executive said on Monday, as the struggling Japanese consumer electronics giant scrambles to generate profits in the hopes of securing fresh financing.

The maker of Aquos brand TVs is projecting an operating profit in the October-March second half of its business year. That would unlock additional funds from banks, after the company won a $4.4 billion bailout from its lenders in October.

Sharp warned in November that it might not be able to survive on its own after doubling its full-year net loss forecast to $5.6 billion.

The October-December operating profit was bigger than planned, thanks mostly to higher revenue from large household appliances and a slight pickup in LCD TV sales, Sharp's president Takashi Okuda told a group of reporters in Osaka.

Sharp posted an operating loss of 24.5 billion yen ($278 million) in October-December 2011.

Okuda's comments came after the trading close on Monday. Sharp ended 4.4 percent lower, versus an 0.8 percent loss in the benchmark Nikkei average.

Sharp shares lost more than half their value in the 2012 calendar year, against a 23 percent rise in the Nikkei index.

HON HAI

Okuda also said the consumer electronics maker was still in talks with Taiwan's Hon Hai Precision Industry Co Ltd on getting a capital investment.

Sharp has been in discussions for months with Hon Hai to make the Taiwanese company its biggest shareholder. Talks, however, stalled after Hon Hai said it expected a say in Sharp's management in return for its investment.

The maker of a slew of electronics products and their components may also sell its TV assembly plant in Mexico to Hon Hai, although talks to sell the Taiwanese company another factory in China have frozen, a source familiar with the matter told Reuters in December.

In December, Qualcomm Inc agreed to invest as much as $120 million in Sharp, giving it a boost in its effort to remain viable. As part of the agreement Qualcomm, through its Pixtronix subsidiary, will work with Sharp - which supplies screens to Apple Inc for its latest iPhone - to develop new power-saving screens based on Sharp's IGZO technology.

Qualcomm made an initial investment of 4.93 billion yen at the end of December in a private placement of stock, giving the U.S. company a 2.64 percent stake after dilution. The timing and amount of the remaining investment will be conditional on Sharp returning to profit.

(Reporting by Yoshiyuki Osada; Writing by James Topham; Editing by Chris Gallagher and Ryan Woo)
Sharp Corp. 6753.TO +12.63% shares are soaring Friday on news that Japanese banks could be coming to the struggling electronics giant’s rescue, and as the yen hits a multi-year low.

Following an impressive rally in December, Sharp rose as much as 12% on Friday morning in Tokyo after a local media report said the company returned to an operating profit in the October to December quarter. Sharp denied the report.

The Nikkei was up more than 1%, hitting a 22 month-high.

Another Japanese media report said Mizuho Corporate Bank and the Bank of Tokyo-Mitsubishi UFJ, the two main creditors of Sharp, are considering providing up to Y200 billion worth of loans in September, as the company is expected to return to the black on an operating basis in the second half of this fiscal year because of the weakening yen. Sharp needs to redeem Y200 billion in convertible bonds in September.

The dollar hit its highest level against the yen on Friday since June 2010 on Friday, after Japan reported a much wider-than-expected current account deficit, and the government approved a Y10.3 billion trillion economic stimulus package.
Taipei, Jan. 14 (CNA) Taiwan-based Hon Hai Precision Industry Co. confirmed Monday that it still plans to buy a stake in ailing Japanese electronics giant Sharp Corp., after a Sharp executive said the company may have several suitors.

Negotiations on the possible tie-up are ongoing, a Hon Hai spokesman said when asked about comments on the potential deal made by Sharp China Group general manager Nobuyuki Sugano to a Chinese newspaper over the weekend.

Hon Hai, the world's biggest contract electronics maker, and Sharp, Japan's largest liquid-crystal display (LCD) panel maker, will make a joint announcement once the planned deal is finalized, the spokesman said.

In a report in the Beijing-based National Business Daily posted online Monday, Sugano was cited as saying that cooperation with Hon Hai is just one of many deals his company is working on.

Sharp "can negotiate with several other companies" on financial and technical cooperation, Sugano said, but he noted that nothing has been made public because none of the potential deals have been finalized.

In the report, Sugano also said Sharp will continue in the development of indium gallium zinc oxide (IGZO), a semiconducting material that can be used as a channel for a transparent thin-film transistor.

He said 30 percent of smartphones Sharp plans to sell in Japan this year will be equipped with the advanced IGZO LCD panels.

Sources at Hon Hai who declined to be named because they are not authorized to do so said Hon Hai welcomed Sharp's possible cooperation with other companies, seeing it as a way for Sharp to raise new funds and for other companies to get access to Sharp technology.

Hon Hai's potential deal with Sharp would cover several topics, including IGZO technology, the acquisition of share and cooperation in other fields. Cooperation talks between them have never been cut off, the sources said.

Sugano's comments may indicate that Sharp is not as keen for a deal with Hon Hai as it was previously.

The company's stock closed at 330 Japanese yen on Friday following a report that it made an operating profit in the final quarter of 2012.

Hon Hai Precision Industry originally agreed early last year to buy a 9.9 percent stake in Sharp for 550 yen a share, but when the stock fell below 200 yen a share in August as the scale of the Japanese company's financial problems came to light, talks were held to discuss a new price.

Hon Hai Chairman Terry Gou has always insisted, however, that the potential deal was about more than simply giving Sharp a capital injection.

He has also pushed for a role in Sharp's management to get the Japanese company back on its feet, a condition that Sharp has been reluctant to accept.

In related news, Hon Hai on Monday declined to comment on another Chinese report that Foxconn, the trade name Hon Hai uses in China, has invested in the production of new alloy materials for the fabrication of high-speed railway carriages in China.

Hon Hai said it would not respond to any reports on new investments. In principle, any investment plan must be approved and verified before being made public, the company said.

(By Chung Jung-feng and
Sharp cuts 70 jobs from its mobile business in China but denies it will exit the market

Sharp has confirmed that it is laying off 70 employees from its mobile business in China, but the company maintains it will not exit the country’s phone market, according to local media reports.

A Sharp PR representative told Chinese new site National Business Daily that the firm is adjusting its business in China with the restructuring, which will see partner Foxconn take control of the development and manufacturing of its devices in the country. Sharp says it will continue to “provide brand and sales support” for its mobile business, a Morning Whistle report explains.

Foxconn’s parent company Hon Hai struck a deal with Sharp to work together to build mobile devices in June 2012. But now it appears that the financially troubled Japanese tech company is downsizing its China-based operations, leaving Foxconn to step into the void.

Sharp originally exited China’s mobile market in 2005, but returned to the space in 2009 when it agree to build high-end devices with MTK, NBD says. Critics have argued that a growth in the production and sales of mid- and low-range devices — exemplified by local brands such as Xiaomi — have made Sharp’s phones too expensive for many, and less desirable than similarly priced devices.

An IDC report on China’s smartphone industry released in August ranked Samsung top on market share, with Lenovo second and ZTE third. Apple (fourth) and Huawei completed a top five that did not include Sharp.

It announced it would cut 11,000 jobs in September, and then revealed plans to lay off 5,000 employees and introduced a $350 million voluntary redundancy program that saw 3,000 staff exit. The 100-year-old company fell into poor financial health following lower than expected sales performance and increased competition.

Qualcomm boosted Sharp in December when it agreed to invest to invest $120 million into the company, but Sharp spent much of last year restructuring its debt crippled business. The company estimates it will post annual losses of $5.6 billion.

We’ve reached out to Foxconn and Sharp for comment.

Update: A spokesperson from Foxconn Technology Group told TNW: “It is our policy not to comment on any matters related to current or potential customers.”
(Reuters) - Sharp Corp has nearly halted production of 9.7-inch screens for Apple Inc's iPad, two sources said, possibly as demand shifts to its smaller iPad mini.

Sharp's iPad screen production line at its Kameyama plant in central Japan has fallen to the minimal level to keep the line running this month after a gradual slowdown began at the end of 2012 as Apple manages its inventory, the industry sources with knowledge of Sharp's production plans told Reuters.

Sharp has stopped shipping iPad panels, the people with knowledge of the near total production shutdown said. The exact level of remaining screen output at Sharp was not immediately clear but it was extremely limited, they said.

Company spokeswoman Miyuki Nakayama said: "We don't disclose production levels."

Apple officials, contacted late in the evening after normal business hours in California, did not have an immediate comment.

The sources didn't say exactly why production had nearly halted. Among the possibilities are a seasonal drop in demand, a switch to another supplier, a shift in the balance of sales to the mini iPad, or an update in the design of the product.

Macquarie Research has estimated that iPad shipments will tumble nearly 40 percent in the current quarter to about 8 million from about 13 million in the fourth quarter, although Apple's total tablet shipments will show a much smaller decrease due to strong iPad mini sales.

APPLE SHARES

Any indication that iPad sales are struggling could add to concern that the appeal of Apple products is waning after earlier media reports said it is slashing orders for iPhone 5 screens and other components from its Asian suppliers.

Those reports helped knock Apple's shares temporarily below $500 this week, the first time its stock had been below the threshold mark in almost one year.

Apple, the reports said, has asked state-managed Japan Display, Sharp and LG Display to halve supplies of iPhone panels from an initial plan for about 65 million screens in January-March. Apple is losing ground to Samsung, as well as emerging rivals including China's Huawei Technologies Co Ltd and ZTE Corp.

NO BIG CHANGE AT OTHER MAKERS

In addition to Sharp, Apple also buys iPad screens from LG Display Co Ltd, its biggest supplier, and Samsung Display, a flat-panel unit of Samsung Electronics.

Both LG Display and Samsung Display declined to comment.

A source at Samsung Display, however, said there had not been any significant change in its panel business with Apple, which has been steadily reducing panel purchases from the South Korean firm.

A person who is familiar with the situation at LG Display said iPad screen production in the current quarter had fallen from the previous quarter ending in December, mainly due to weak seasonal demand that is typical after the busy year-end holiday sales period.

Sterne Agee analyst Shaw Wu said some of the product cutbacks at Sharp are probably seasonal.

"The March quarter is almost always weaker than the December quarter," he said, adding that Apple also consolidates suppliers of certain components during quarters with weaker demand. "The Korean manufacturers are more efficient and typically have lower costs."

Apple's iPad sales may have also suffered amid a weak Christmas shopping period that hurt other consumer gadget makers as well.

CROWD OF RIVAL PRODUCTS

Apple also faces stiffening competition in tablets from a growing crowd of rival products from makers including Samsung with its Galaxy and Microsoft Corp's Surface. A consumer shift to smaller 7-inch screen devices, which Apple responded to late last year by launching its iPad mini for $329, are adding pressure.

BNP Paribas expects the iPad mini will eat into sales of the full-sized iPad, with the mini rise to 60 percent of total iPad shipments in the January-March quarter.

Looking to cut into Apple's market share in the smaller segment are Amazon.com Inc with its Kindle and Google Inc with its Nexus 7.

CEO Tim Cook, who is credited with building Apple's Asian supply chain, has overseen several gadget launches, including the iPhone 5, the latest iPad models and the iPad mini during his first year, is under pressure to deliver the kind of product innovations that wowed consumers during Steve Jobs' tenure to keep his company's profit growth stellar.

Sharp, which also supplies screens for the iPhone, has been working with its main banks on a restructuring plan after posting a $5.6 billion loss for the past fiscal year. To secure emergency financing from lenders including Mizuho Financial Group and Mitsubishi Financial Group it had mortgaged its domestic factories and offices including the one building screens for Apple.

In December, Qualcomm Inc agreed to invest as much as $120 million in Sharp and the two companies said they would work to develop new power-saving screens.

(Additional reporting by Poornima Gupta in San Francisco; Writing by Tim Kelly; Editing by Ken Wills and Richard Chang)
Japan’s junk bonds are joining the global rally as optimism over Prime Minister Shinzo Abe’s economic stimulus boosts investor appetite for riskier debt.
Sharp Corp.’s 0.846 percent bonds due 2014 soared to 77 yen per 100 yen face value on Jan. 28, from 46 yen two months ago, according to JS Price data. The notes of junk-rated Tokyo Electric Power Co., Nippon Sheet Glass Co. and Kawasaki Kisen Kaisha Ltd. (9107) also climbed. Global non-investment grade debt has gained to a record 105 cents on the dollar, Bank of America Merrill Lynch index data dating back to 1997 show.

http://www.bloomberg.com/news/...arp-worry-fades.html
TOKYO (AP) — Japanese electronics makers Panasonic and Sharp both stuck to full year forecasts for massive losses even as results for the latest quarter got a boost from the weaker yen.

The two Osaka-based companies are among the Japanese electronics makers battered by price plunges in gadgets and hot competition from more successful rivals such as Apple and South Korea's Samsung.

Panasonic reported a 61.4 billion yen ($667 million) profit for the October-December period Friday. It had a loss of 698 billion yen in the previous quarter and a loss of 197.6 billion yen a year earlier. Quarterly sales slipped 8 percent to 1.8 trillion yen ($19.6 billion).

The company, which makes Viera TVs and Lumix digital cameras, said global demand weakened for flat panel TVs and digital products and devices while sales grew in LED lighting and auto-related equipment.

Sharp, which makes Aquos TVs and solar panels, reported a smaller flow of red ink for October through December. Its quarterly net loss shrank to 36.7 billion yen ($399 million) from 173.6 billion yen a year earlier.

more here
TOKYO (Reuters) - Sharp Corp eked out a quarterly operating profit on Friday, improving the bailed-out consumer electronics maker's chances of convincing lenders and shareholders that it remains a viable company.

Sharp stuck to its forecast for a 13.8 billion yen ($151 million) operating profit in the second half, after losing 168.9 billion yen in the first half as the maker of goods from airconditioners to televisions was savaged by lower-cost rivals.
"The results gave a sense of relief to investors as it was able to keep promises with its banks to turn around its business," said Makoto Kikuchi, chief executive of Myojo Asset Management.

"The next focus is whether the company can be profitable on a net basis for the next fiscal year," he added, warning that it faced potential restructuring costs.

Sharp reported a third-quarter operating profit of 2.6 billion yen ($28.5 million), compared with a loss of 24.4 billion yen a year ago and beating market forecasts for a small loss.
Its earnings were bolstered by robust sales of home appliances and mobile phones, along with a weaker Japanese yen that helped it compete overseas.

The group said it made money from its TV business in the third quarter but forecast deeper annual losses from LCD panels due to softer demand for small and medium sized panels for smartphones.
The turnaround will allow Sharp's banks to justify a bailout that last year kept the maker of Aquos TVs in business. It would also unlock further investment from Qualcom Inc that would make the U.S. chipmaker its biggest shareholder.
However, Sharp's future remains in the balance, say investors. It faces tough competition in TVs and LCD screens, and with few assets to fall back on, its cash position is tenuous.

"Sharp has a very small breathing space," said Yuuki Sakurai, CEO at Fukoku Capital Management in Tokyo. "I don't think people are very confident about the future of Sharp at the moment."

Sharp is not as sensitive to foreign exchange movements as more export-reliant competitors, but a one yen change in the dollar/yen rate adds $7.7 million to operating profit. The Japanese currency eased by about 9 yen against the dollar over the course of the quarter.

CASH STRAPPED
Sharp won a $4.4 billion bailout from banks including Mizuho Financial Group and Mitsubishi Financial Group last October when it faced the repayment of commercial paper debt it didn't have enough money to pay.
The firm had to mortgage its offices and factories in Japan, including one that makes screens for Apple Inc's iPad and latest iPhone, leaving it with only a few overseas plants it could sell to raise more cash.
It warned in November that it may not be able to survive on its own and doubled its full-year net loss forecast to $5.6 billion.
"It could be that the company and some part could be absorbed by an American company or some part by the Taiwanese," said Fukoku Capital's Sakurai.

Sharp may sell its Chinese TV assembly plant to Lenovo Group , sources told Reuters this month. It is also in talks to sell a Mexico factory to Hon Hai Precision industry , which earlier bought a stake in Sharp's advanced TV panel plant in western Japan.
Hon Hai balked at an earlier agreement to invest in Sharp directly as the Japanese company resisted giving any significant management control to its Taiwanese partner.

Sharp in December turned to Qualcomm, which agreed to invest as much as $120 million in the Japanese company. Qualcomm has made an initial investment and payment of the rest depends on Sharp returning to profit in the six months ending March 31.

Since the start of the year Sharp's shares -- which slumped 55 percent in 2012 -- have risen 5.9 percent compared with a 7.5 percent gain in the benchmark Nikkei 225. Its shares rose 2.9 percent on Thursday, while the benchmark added 0.4 percent.

($1 = 91.2600 Japanese yen)
(Additional reporting by Nobuhiro Kubo; Editing by Richard Pullin)
(Reuters) - Sharp Corp is unlikely to include a capital infusion from Hon Hai Precision Industry Co Ltd in its turnaround plan as talks between the two companies have hit a snag, sources familiar with the matter said.

The Japanese consumer electronics maker and its main lenders are drawing up a business plan to convince shareholders and creditors that Sharp can survive its ongoing difficulties with debt and fierce competition from foreign brands.

The tieup with the Taiwanese company, best known as one of Apple Inc's manufacturing partners, would have been the pillar of Sharp's revival efforts. But talks to sell a 9.9 percent stake to Hon Hai have stalled over arguments about executive control, as the March deadline looms.

"We cannot make a plan based on something that is uncertain. For us, it's over," said a banking source who declined to be identified because they were not authorized to discuss the matter publicly.

Without a Hon Hai's capital infusion, the Osaka-based firm will need to devise other ways to boost its capital. It must also persuade its creditors to refinance debts. In October, it won a $4.4 billion bailout from its banks to repay short-term loans and stave off failure.

In December, chip maker Qualcomm Inc agreed to invest as much as $120 million in Sharp. As part of that agreement, Qualcomm said it would work with Sharp to develop new, power-saving screens based on Sharp's IGZO technology.

Sources said drawing up Sharp's business plan has fallen behind schedule as the company has yet to come up with convincing growth strategies, and an announcement is not likely to come until after its new financial year which starts in April.

A Sharp spokeswoman declined to comment.

(Reporting by Taiga Uranaka and Reiji Murai; additional reporting by James Topham; Editing by Daniel Magnowski)
(Reuters) - Sharp Corp is likely to seek fresh bank loans to help it repay a $2.1 billion convertible bond due in September, with no further equity deals likely after Samsung Electronics Co agreed to buy a 3 percent stake in the company for $111 million, three sources familiar with the matter said.

"With Samsung, the tie-ups in panels are over. I doubt there will be any more," an executive at Sharp told Reuters on condition that he not be identified, due to the sensitivity of the matter.

The Samsung deal followed an agreement in December for Qualcomm Inc to invest as much as $120 million.

The potential sale of overseas TV assembly plants in Mexico and China could add more to Sharp's available cash but talks for Taiwan's Hon Hai Precision Industry Co Ltd to buy a stake in the company have stalled with a March 26 deadline fast approaching.

Sharp, which in November said it may not be able to survive on its own, is in talks to offload its Chinese TV assembly plant to Lenovo Group Ltd and to sell its Mexico factory to Hon Hai, according to sources familiar with the discussions.

"Without investment from Hon Hai, Sharp will need to raise at least 50 billion yen ($535 million) from the sale of overseas factories and other assets to pay off the bond in September," said Deutsche Securities analyst Yasuo Nakane. The rest of the money would come from cashflow and fresh financing, he added.

The banks that bailed out Sharp in September with $3.9 billion in emergency loans, including Mizuho Financial Group Inc and Mitsubishi UFJ Financial Group Inc, are not including a Hon Hai investment in a business plan they are hammering out for Japan's leading LCD panel maker, sources told Reuters last month.

The next step for Sharp is bank financing, an executive at one of the banks and a separate source at Sharp told Reuters. Fresh loans could total around $1 billion, according to analysts, which would raise the cost of Sharp's bailout to about $5 billion.

Sharp's shareholder equity ratio at the end of 2012 was 9.6 percent, less than half the 20 percent usually considered the minimum for financial health.

To secure its bailout last year, Sharp pledged to cut jobs and sell assets while mortgaging nearly all of its factories and offices in Japan, leaving it with only overseas assets that could be sold to improve its finances.

A junk rating from credit agencies has made raising money in the credit markets expensive for Sharp. Standard & Poor's rates Sharp's debt as B+, a highly speculative grade, while Fitch Ratings has Sharp at B-. Moody's Investors Service withdrew its rating on Sharp in April.
(Reuters) - For Samsung Electronics Co Ltd, the world's No.1 maker of smartphones, TVs and memory chips, this week's deal to invest in a Japanese display maker spotlights an uncomfortable fact: it is no longer the undisputed global leader in displays.

Cross-town rival LG Display Co Ltd overtook Samsung's display unit last year as the world's top maker of liquid crystal displays.

LG Electronics Inc, an affiliate of the display company, has beat Samsung to market with a TV using a new technology - thin, bright organic light-emitting diode (OLED) screens - on which Samsung has staked its future in the display business.

And even Japan's Sharp Corp, which had to be bailed out by its banks last autumn and which Samsung has now taken on as a partner, has pulled into the lead in some of the latest LCD production and thin-screen technology.

Samsung's modest $111 million investment in Sharp, announced on Wednesday, will thus not only give it access to the Japanese company's technology, it will turn up the heat on its own display unit that many analysts say has some catching up to do.

"It's a warning message in a sense that Samsung is sending to Samsung Display," said an industry analyst with a top four-star rating from Thomson Reuters StarMine, who declined to be named because of the sensitivity of the subject.

SYMBOLIC STAKE

The latest deal, which will give Samsung a symbolic 3 percent stake in Sharp, is a drop in the bucket from the South Korean goliath's 37.4 trillion won ($34.5 billion) in cash.

But it will give Samsung a broader supplier base, access to Sharp's low-cost thin-screen technology, and a foot in the door at one of Apple Inc's key Asian display suppliers.

The need for this sort of tie-up marks an unusual departure for the ascendant technology company, heralded for aggressive management that allowed it to leapfrog past Japanese giants such as Sony Corp and Toshiba Corp in markets from consumer electronics to semiconductors.

Samsung's $230 billion market capitalization is more than six times the combined value of Japan's top three TV makers -Sony, Sharp and Panasonic Corp.

One possible impetus for the equity deal, Samsung's first with a major Japanese electronics company, could be faltering screen orders from Apple, which is both a major customer and its main competitor in the global smartphone market.

Sharp is Apple's second-largest display supplier, according to industry analysts and research firms. Apple itself does not reveal information about its suppliers.

But the bigger issue for Samsung will be ensuring its OLED screen development efforts are on track.

Samsung's strategic shift to OLED technology was spurred in part by the roaring success of its Galaxy smartphones, which featured the bright, power-saving displays and propelled Samsung into the No.1 spot last year in the world smartphone market.

Samsung now holds a near monopoly in the production of small, smartphone-sized OLED displays, which it produces at the rate of nearly half a million a day, garnering double-digit profit margins.

Samsung has struggled to produce televisions using OLED screens, however, as it stuck with the conventional RGB form of the technology that is difficult to scale to large glass sizes.

LG has opted for white OLED technology that uses a cheaper, maskless manufacturing method with a lower error rate and higher productivity, although some experts say it loses some of the color brightness that has made OLED a promising frontier for TV makers.

PREMIUM PRODUCT

Samsung, which tore apart a Sony TV in the 1970s to learn new technologies, ended Japan's three-decade reign at the top of the TV market in 2006 and has since enjoyed healthy profit margins while its Japanese rivals bleed record amounts of red ink.

Its success was fed in large part by the aggressive launch of new technologies such as Internet-enabled TV sets and LCD TVs backlit with power-saving light-emitting diodes.

OLED TVs, which LG sells for more than $10,000 for a 55-inch model, were supposed to be the next premium product to prop up margins as the global TV market stagnates in a weak economy.

But the delay in Samsung's OLED models have forced it to seek its next big boost from ultra-definition television, which others have been pursuing with LCDs - where Samsung now lags.

"With the (OLED) project pushed back ... Samsung instead plans to lead the high-end market through over-60-inch UD TVs, which are becoming popular," said Peter Yu, an analyst at BNP Paribas.

That's where Sharp enters the picture.

Sharp has the world's only so-called 10th-generation display factory, which uses bigger sheets of glass that, at 3 meters square, can be cut into eight 60-inch panels for large TV screens. That's far more efficient than eighth-generation plants that analysts say yield only three 60-inch screens per sheet.

Samsung Display's main LCD TV screen plants are seventh and eighth generation, suitable for 40 to 60 inch screens. It has held off on investing in larger panels given its strategic move into OLEDs, which are thin enough to bend or roll like paper, paving the way eventually for wearable computers and curved-screen TVs.

"I believe Samsung's big push for OLED is the right decision, given all the benefits OLED has over LCD, but overpromise and under delivery caused a bit of hiccup here," said Lee Sun-tae, an analyst at NH Investment & Securities. He saw the Sharp deal as a way to help keep Samsung in the game until OLED is on board.

"This is definitely a good deal, as it allows Samsung to add large screen capacity at just a fraction of the cost of building a 10G plant. Samsung seized the right opportunity from Sharp's financial difficulty."

(Additional reporting by Tim Kelly in TOKYO; Editing by Edmund Klamann)
(Reuters) - Hon Hai Precision Industry Co Ltd will not invest in Sharp Corp by a March 26 deadline after the two firms failed to revise an earlier agreement, although the Taiwanese company has not ruled out an investment altogether, a newspaper said.

Hon Hai Chairman Terry Gou met Sharp's bankers to inform them no deal would be struck this month but he would look at the merits of an investment after the struggling Japanese display maker unveils a new business plan in the near future, the Asahi newspaper reported without saying where it got the information.

Talks for Hon Hai to buy as much as a 9.9 percent stake had stalled after Sharp balked at its demand that it be given a degree of management control.





Hon Hai also sought to lower the $708 million price tag after Sharp's stock slumped in the wake of losses that prompted a bailout from its banks last year.

Sharp's banks, which include Mizuho Financial Group Inc and Mitsubishi UFJ Financial Group Inc, had not been expecting a revised deal, sources told Reuters last month.

Sharp spokeswoman Miyuki Nakayama and a spokesman for Hon Hai both said the two companies would continue to negotiate until the deadline.

As talks with Hon Hai unraveled, Sharp concluded smaller investment deals with Samsung Electronics Co Ltd and Qualcomm Inc. It may also have to find other ways to raise money to repay a $2.1 billion convertible bond due in September.

Sources at Sharp and its banks as well as analysts have told Reuters they expect the company will resort to equity financing to make up any shortfall after it adds up available cashflow and gains from asset and stake sales.

Its scope for asset sales, however, is limited because it had to mortgage nearly all its domestic factories and offices to secure emergency bank loans. A junk credit rating makes bond issues an expensive proposition for the Japanese TV pioneer.

Under the deal with Samsung announced this week, the South Korean company will take a 3 percent stake for around $110 million and Sharp will supply it with screens for its TVs and mobile devices. That deal followed an agreement in December for Qualcomm to invest as much as $120 million.

Sharp is also in talks to sell its Chinese TV assembly plant to Lenovo Group Ltd and to sell its Mexico factory to Hon Hai, according to sources familiar with the discussions. Hon Hai already owns a third of Japan's liquid crystal display plant in Sakai western Japan, the world's most advanced display factory.

($1 = 94.6650 Japanese yen)

(Reporting by Tim Kelly; Editing by Edwina Gibbs)
P4p'ers

Recently I've read a few articles from the likes of Industry Analysts and This Week in Imaging and both have downplayed the Sharp debt crisis. I know that The Week in Imaging has Sharp as a sponsor and I also believe that Industry Analysts has something going also.

Even though some of the reports from Sharp have been better as of late. The recent money from Samsung and Qualcomm which total 230 million dollars is chump change when compared to the $2.1 billion convertible bond that is due in September of 2013.

In 45 days or so we should have a better handle as where Sharp financials are. I'm expecting some improvement, however Sharp has already mortgaged most of it's properties and sold 6% of the company.

With Terri Gau of Hon Hai now backing off on the March 25th deadline that was to inject 708 million into Sharp and a 9.9% stake. This leaves a mere 6 months for Sharp to turn things around.

From what I've read is that the only way Hon Hai will invest is with a seat on the board of Sharp. Chinese and Japanese is not a good mix and this has been the thorn in the side for this deal since Sharp started to freefall in the fall of 2012.

It's not over, and it's not good.
(Reuters) - Sharp Corp (6753.T) may sell new shares to help it repay a $2.1 billion convertible bond due in September, after a deal with Samsung Electronics Co (005930.KS) raised $111 million in return for a 3 percent stake in the Japanese company, three sources familiar with the matter said.

"With Samsung, the tie-ups in panels are over. I doubt there will be any more," an executive at Sharp told Reuters on condition that he not be identified, due to the sensitivity of the matter.

The Samsung deal followed an agreement in December for Qualcomm Inc (QCOM.O) to invest as much as $120 million.

The potential sale of overseas TV assembly plants in Mexico and China could add more to Sharp's available cash but talks for Taiwan's Hon Hai Precision Industry Co Ltd (2317.TW) to buy a stake in the company have stalled with a March 26 deadline fast approaching.





Sharp, which in November said it may not be able to survive on its own, is in talks to offload its Chinese TV assembly plant to Lenovo Group Ltd (0992.HK) and to sell its Mexico factory to Hon Hai, according to sources familiar with the discussions.

"Without investment from Hon Hai, Sharp will need to raise at least 50 billion yen ($535 million) from the sale of overseas factories and other assets to pay off the bond in September," said Deutsche Securities analyst Yasuo Nakane. The rest of the money would come from cashflow and fresh financing, he added.

The banks that bailed out Sharp in September with $3.9 billion in emergency loans, including Mizuho Financial Group Inc (8411.T) and Mitsubishi UFJ Financial Group Inc (8306.T), are not including a Hon Hai investment in a business plan they are hammering out for Japan's leading LCD panel maker, sources told Reuters last month.

The next step for Sharp is equity financing, an executive at one of the banks and a separate source at Sharp told Reuters. Fresh equity financing could total around $1 billion, according to analysts.

Sharp's shareholder equity ratio at the end of 2012 was 9.6 percent, less than half the 20 percent usually considered the minimum for financial health.

To secure its bailout last year, Sharp pledged to cut jobs and sell assets while mortgaging nearly all of its factories and offices in Japan, leaving it with only overseas assets that could be sold to improve its finances.

A junk rating from credit agencies has made raising money in the credit markets expensive for Sharp. Standard & Poor's rates Sharp's debt as B+, a highly speculative grade, while Fitch Ratings has Sharp at B-. Moody's Investors Service withdrew its rating on Sharp in April.

($1 = 93.5200 Japanese yen)

(Additional reporting by Taiga Uranaka and Yoshiyuki Osada; Writing by Tim Kelly; Editing by Edmund Klamann)

(This story was refiled to correct the headline, first and eighth grafs to state that Sharp is likely to seek fresh equity financing, not bank loans)
quote:
The banks that bailed out Sharp in September with $3.9 billion in emergency loans, including Mizuho Financial Group Inc (8411.T) and Mitsubishi UFJ Financial Group Inc (8306.T), are not including a Hon Hai investment in a business plan they are hammering out for Japan's leading LCD panel maker, sources told Reuters last month.


Note from Art:

So as many pundits thought that the banks would not have say in Sharps new business plan, the above sentence states that the two banks are involved with the New Sharp business plan moving forward.
quote:
Originally posted by SalesServiceGuy:
Despite the $2.1B bond that must be repaid in Sept 2013, Sharp is still innovating with new copier product and signing up new dealers. It cannot be all doom and gloom in their copier business.

Although I have tried to pitch the Corporate "doom and gloom" story to accounts where Sharp is involved, it does not seem to get much traction with buyers.


I don't think it is doom and gloom for the copier business either, however I do make mention with every account that is considering Sharp that they now about the financial condition of the company. Just because things are fine now with the copier division does not mean they may be fine in a year or more from now.

I'm curious to see how all of this pans out.

- Japan's Sharp Corp is aiming to raise 100 billion yen ($1 billion) from share sales by the end of September as the struggling display maker looks to partnerships and a public offering to bolster its finances, media reports and sources familiar with the situation said on Friday.

The company plans a public offering of 90 billion yen by end-September, Kyodo news agency reported, while two sources familiar with the matter said it plans to raise 10 billion yen through a share sale to housing appliance maker Lixil Group Corp.

 

Sharp is also sounding out other companies including power tools maker Makita Corp to buy shares, the sources told Reuters.

 

The Osaka-based company, which supplies display panels for Apple Inc's smartphones, received a $4.6 billion rescue from banks last year and has since received investments from Samsung Electronics Co Ltd and Qualcomm Inc.

 

Japanese media have flagged the possibility of a public offering this year although the specific timing had remained unclear before Friday's mention of an end-Friday target.

 

Shares in Sharp rose more than 5 percent in morning trade on Friday to 490, their highest in seven weeks. They have gained nearly 15 percent over three days.

 

The company said in a statement nothing had been decided regarding a public share offer or a share sale to companies.

 

Sharp has forecast an 80 billion yen operating profit for the year to next March 31, after logging a 146.27 billion yen operating loss last year.

 

($1 = 100.62 Japanese yen)

(Reuters) - Shares in Sharp Corp  climbed 3.7 percent to 480 yen, hitting a seven-week high on Friday after Kyodo news agency said the display maker plans to raise about 100 billion yen ($1 billion) through share sales.

Kyodo cited sources familiar with the matter as saying that Sharp plans to raise around 90 billion yen through a public stock offering by the end of September and up to 10 billion yen selling shares to housing equipment maker Lixil Group.

 

Separately, the Nikkei business daily said Sharp was also planning to raise 10 billion yen from power tool maker Makita Corp.

 

"The fact that they are going to get funds from direct investment from other companies that seems a very positive thing. It's non-dilutive to a degree," a Tokyo-based trader said. "It's dilutive on an EPS basis and dividend. But they don't pay a dividend, so nobody cares."

 

Sharp's shares have risen more than 12 percent over the past three sessions. ($1 = 100.6250 Japanese yen) (Reporting by Dominic Lau; Editing by Edmund Klamann)

The following appears on engadget.com

Despite posting a small 15.36 million yen ($182 million) loss, it would be hard to call Sharp’s latest Q1 2013 financial quarter anything but a success after last year’s$1.2 billion debacle. After gaining investment from companies like Samsung and, more recently, Qualcomm, Sharp saw revenue up 32.6 percent to 607 billion yen ($6.2 billion) on strong LCD demand. In fact, sales of small- and medium-sized panels for smartphones and tablets were up a hefty 54.8 percent over Q1 2012, with its electronics division up 46.6 percent overall. The company thinks it’ll hit a net profit for the fiscal year thanks to “high-value” 4K LCD TVs, Aquos phones in Japan and more IGZO displays for upcoming handhelds.

 

Click here to read the rest of the article on engadget.com

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