Sharp eyes profits, not share sale, to boost finances
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[July 01, 2014]
By Reiji Murai
OSAKA Japan (Reuters) -
Japan's Sharp Corp aims to bolster its depleted finances
by boosting profits and is not considering a public
share offering, which would be unrealistic so close on
the heels of an offering last year, the display maker's
The company raised about 140 billion yen ($1.38 billion) through a
share sale late last year but a Japanese newspaper report in April
said it was considering another issue over the next year to secure
an additional 200 billion yen to improve its finances.
The company's equity ratio at end-March was 8.9 percent, below the
20 percent level typically considered a threshold of financial
health, and it decided to forego a dividend for the year.
"We are absolutely not considering a public share offering," Sharp
President Kozo Takahashi told a round table for reporters on
"Doing this so soon would not make sense," Takahashi said. "We will
build up our capital by boosting our profits."
Sharp has projected a rise in net profit to 30 billion yen in the
year to next March from last year's 11.6 billion, as it seeks to
turn around its fortunes after posting a massive 545.4 billion yen
net loss in the year to March 2013.
It has received a $4.4 billion bailout from its banks, issued new
shares and took in equity investments from Samsung Electronics Co
and Qualcomm Inc.
Takahashi reiterated comments last week by another Sharp executive
at the company's annual shareholders' meeting that it had received
no offer from Taiwan's Hon Hai Precision Industry Co on an equity
investment. Hon Hai Chairman Terry Gou told a Japanese magazine in
an article published this month that his company was still
interested in investing in Sharp.
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He added the company, a supplier of screens to iPhone and iPad maker
Apple Inc, did not expect to make any large-scale investments - on
the order of 300 billion to 400 billion yen - in the liquid crystal
display business in the foreseeable future.
Sharp had also been considering the sale of overseas TV factories as
it sought cash, but Takahashi said: "Talks with buyers did not make
progress and last year our TV operations moved into the black. This
isn't a situation in which we have to make a sale."
($1 = 101.4600 Japanese Yen)
(Writing by Edmund Klamann; Editing by Chris Gallagher)
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