Sharp Said to be Seeking Financial Assistance from Government-Backed Fund

sharp worldMay 5, 2015 – Bloomberg News reports that shares for Japan-based Sharp Corporation increased the most in more than a year after a person familiar with the matter said Sharp Corporation plans to ask a government-backed fund for help in spinning off part of its liquid-crystal display business.

According to Bloomberg, Sharp is seeking investment from Innovation Network Corporation of Japan to form a subsidiary that will make LCD panels to be used in smartphones and tablet PCs. The proposal however hasn’t been made public.

Bloomberg notes:

“Sharp, headed for a third loss in four years, has said it’s considering ‘drastic reform’ as the supplier of displays to Apple Inc. prepares a management plan for release in May. Talks on investment by Foxconn Technology Group have foundered, and bets against the company’s shares rose to the highest level since 2013 last month as the debt-strapped maker of Aquos TVs considers whether to continue rescue talks with Foxconn.

“’If INCJ invests in Sharp, there will be lower possibility of bankruptcy and there will be less investment burden for Sharp,’; said Yasuaki Kogure, chief investment officer at SBI Asset Management Co. in Tokyo. ‘This is huge for Sharp. If you don’t continue investing in the industry, you will be surpassed by others very quickly.’”

The Japanese government provides most of the funding for Innovation Network of Japan (INCJ). INCJ also obtains support from various companies, which take smaller stakes in INCJ projects.

More Resources

%d bloggers like this: