eyes another share offering, could raise $2 billion: media
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[April 14, 2014]
TOKYO (Reuters) — Sharp Corp, Japan's largest display
maker, is considering another issue of new shares that could raise
around 200 billion yen ($1.97 billion) to replenish its depleted
capital base, the Asahi newspaper reported on Sunday.
Sharp is aiming to launch the offering during the current financial
year to March 2015 after carrying out restructuring at its flagship
Kameyama LCD display factory and putting its earnings on a solid
recovery path, the newspaper said.
No one at Sharp could be reached for comment on Sunday.
The reported move comes after Sharp announced in February that it
would beat a previous operating profit forecast for the financial
year ended last month on the back of strong orders from Chinese
makers for smartphone panels.
On a net basis, Sharp is forecasting a profit of 5 billion yen for
the year just ended, which would mark a return to the black after
losing a cumulative 921 billion yen over the previous two years amid
fierce competition in the LCD market.
Sharp raised about 140 billion yen in the final months of 2013 but
its equity ratio — a key measure of financial stability — stood at
just 13 percent at the end of December, below the 20 percent
threshold that is considered healthy.
There are many people, including some of Sharp's bankers, that have
voiced opposition to the move given that Sharp would be embarking on
a large-scale equity financing two years in a row, the Asahi report
To seek the understanding of its stakeholders, Sharp aims to come up
with a restructuring plan that will focus on shoring up the Kameyama
plant in Mie Prefecture, which has struggled with big swings in
operating rates, the newspaper said.
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Sharp has been reducing output of large, TV-use LCD panels and
shifting focus to smaller panels for high-end smartphones. The
company is aiming to lower costs further so that it can tap into
booming demand for lower-end models, the Asahi said.
There is a chance Sharp would not be able to raise the desired
amount of funds from the market if its earnings and stock price
languish, the Asahi said, adding that the company would look to make
a decision on the share offering in 2014.
(Reporting by Nathan
Layne; editing by Paul Tait)
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