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Sharp Considers 200 Billion Yen in New Shares, Asahi Says

By Masaaki Iwamoto
April 13, 2014 2:37 AM EDT

Sharp Corp. (6753) plans to increase capital through a public share offering in the fiscal year ending March 2015, the Asahi newspaper reported today.

The supplier of displays for Apple Inc.’s iPhone and iPad might raise about 200 billion yen ($2 billion), the report said, without attribution. Sharp said in a statement to the Tokyo Stock Exchange today that it’s considering various options to increase capital and hasn’t decided on a method.

Sharp forecast a return to profit in the year ended March 31 on cost reductions and demand for solar panels, after posting a combined 921 billion yen of losses in the previous two years. The financing will help boost the company’s capital-to-asset ratio to as high as 20 percent from about 8 percent now, Asahi said.

Osaka-based Sharp last year raised 137.7 billion yen through public and secondary offerings, including stock sales to Makita Corp., Denso Corp. and Lixil Group Corp., according to an earnings statement on Feb. 4.

The maker of Aquos TVs plans to unveil a new restructuring plan to help convince potential investors among financial institutions, Asahi said. The strategy will focus on cutting production costs at its Kameyama flat-panel factory in central Japan to expand into the market for lower-priced smartphones, it said.

The company’s surprise loss forecast in August 2012 sent its shares plunging and sparked ratings downgrades, making it difficult to raise money and pushing Sharp to the brink of default. It has since cut jobs and sold stakes to Foxconn Technology Group, Samsung Electronics Co. and Qualcomm Inc. to shore up finances.

Return to Profit

Sharp forecasts 5 billion yen of net income in the fiscal year just ended, from a 545.4 billion yen loss the previous period. Profit may climb to 28 billion yen this year, according to a median estimate of 13 analysts compiled by Bloomberg.

Shares of the electronics manufacturer closed at 299 yen on April 11 in Tokyo, more than double the all-time low of 143 yen in October 2012. The stock has declined 11 percent this year, compared with a 13 percent slide by the Topix (TPX) index.

To contact the reporter on this story: Masaaki Iwamoto in Tokyo at miwamoto4@bloomberg.net

To contact the editors responsible for this story: Stanley James at sjames8@bloomberg.net Pavel Alpeyev, Jim McDonald

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