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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.

http://www.reuters.com/article...101?type=companyNews

(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.
quote:
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.

http://www.reuters.com/article...101?type=companyNews

(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.

http://www.reuters.com/article...102?type=companyNews

"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."

http://www.dailystar.com.lb/Bu...record-loss-forecast
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 myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
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.

http://www.zdnet.com/sharps-ea...bscribed-7000007650/
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.

SHARES PLUMMET
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)
ENDITEM/J
(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.

http://gadgets.ndtv.com/tv/new...illion-report-303387
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 myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
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.
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.

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