Banks to Provide Sharp with $1.7 Billion Bailout, Layoffs in the Works, Reports Loss for Fiscal Year
May 14, 2015 – Sharp Corporation of Japan reports that it’ll be receiving 200 billion yen (U.S. $1.7 billion) in aid from Japanese banks as part of a restructuring that will include layoffs, with the company reporting a loss of 222.35 billion yen ($1.9 billion) for its fiscal year ended March 31, 2015.
Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ, both of Japan, will contribute a combined 200 billion yen (U.S. $1.7 billion) to repay Sharp’s debt in a debt-for-equity deal. A government fund, Japan Industrial Solutions, will also provide 25 billion yen, which will be used to fund growth.
Sharp says it won’t exit its struggling LCD business, but in return, will restructure, which will include cutting 10 percent of its global workforce and selling assets such as its headquarters. The layoffs will consist of voluntary retirements in Japan and downsizing of its overseas employee base.
“We are aiming for a fresh start, one that will lead to a recovery,” Sharp CEO Kozo Takahashi said.
For its current fiscal year, Sharp is forecasting a return to operating profit, with a goal of 80 billion yen, compared with to operating loss of 48 billion yen in its fiscal year just ending.
Sharp will also re-build its current corporate structure that includes two business groups and eight business units into five companies. The five companies will consist of:
- Consumer Electronics Company
- Energy Solutions Company
- Business Solutions Company
- Electronic Component and Device Company
- Display Device Company
For its fiscal year ending March 31, 2015, Sharp reported that sales down 4.8 percent versus the previous year. St attributed the sales decline mainly to a sales decline in LCD TVs and Energy Solutions, and a price drop in small- and mid-size LCDs. The bright spot for the year was Sharp’s Business Solutions group, as sales for this group totaled 340.3 billion yen, up 6.percent, with Sharp reporting that sales of MFPs increased overseas.
- February 2015: SHARP FALTERS WITH LATEST FINANCIAL RESULTS, BUT MFP BUSINESS SEES GAINS
- January 2015: SHARP SELLS U.S. HQ IN MAHWAH, BUT WILL LEASE SITE TO STAY THERE
- November 2014: SHARP REPORTS PROFITABLE FISCAL HALF-YEAR; FORECASTS HIGHER SALES FOR FULL YEAR
- August 2014: SHARP REPORTS SMALLER LOSS FOR QUARTER, ON TRACK FOR PROFIT FOR FULL YEAR