Japanese fund considers rescue package for Sharp Corp
Tue 13 Oct 2015
A government-backed Japanese fund with a history of rescuing ailing tech companies may be offering a lifeline to the struggling Sharp Corp. Specialising in the manufacture of premium televisions, Sharp has experienced recent losses, with a report asserting that Sharp was expected to post a loss of ¥180 billion in the current year (the equivalent of $1.45 billion).
The Innovation Network Corp of Japan has opened negotiations with the Tokyo based tech company, which was founded 103 years ago, and in an interview with Reuters INCJ President Mikihide Katsumata said: “We are ready to talk with Sharp if the company needs funds for its growth strategy and meets our investment policy.”
Sharp has been facing stiff competition from its Asian rivals (such as Japan Display Inc) with respect to pricing pressure. Another notable issue is that of the slowing economy in China. Japan Times has reported that Sharp’s liquid crystal display panel business is expected to result in a higher than expected operating loss of ¥50 billion in the first half of the business year.
The report says that earlier this year a $1.9 billion bailout was granted to Sharp by the major banks. INCJ is, incidentally, a top investor in one of Sharp’s rivals, Japan Display Inc. The report also claims that support could be wider than initially thought if INCJ goes ahead with the potential investment package – it is claimed that initial plans would have seen investment only in Sharp’s key display panel division.
The Ministry of Economy, Trade and Industry (which has jurisdiction over INCJ) is reported to have concerns that Sharp’s technological innovations (such as its Igzo display panels for devices such as smartphones) could be routed abroad. If the investment proceeds, INCJ will have a comprehensive involvement in the reconstruction of Sharp.
Sharp retains major manufacturing facilities at Toruń, Poland and in Indonesia, and retains 64 bases in thirty countries, employing 46,600 workers, approximately half of which are based in Japan.