Sharp in talks with Toppan, Dai Nippon for Sakai plant
OSAKA, Japan (Reuters) - Sharp Corp, Japan's last major fabricator of liquid crystal displays for televisions, said on Tuesday it was in talks with suppliers Toppan Printing and Dai Nippon Printing to sell new shares in its main Sakai plant to spin it off.
Sharp, struggling with a glut in supply of LCDs and weak demand for televisions, further raised its overall loss forecast for the year that ended March 31 to a record net deficit of 380 billion yen ($4.8 billion), from an estimate in February for a loss of 290 billion yen.
"We recognise that our outlook was optimistic," Tetsuo Onishi, an executive managing officer at Sharp, told a news conference in Osaka.
Sharp in March agreed to issue shares worth 66.9 billion yen ($822 million) to Taiwan's Hon Hai Precision Industry in return for an 11 percent shareholding.
As part of Sharp's tie up with Hon Hai, the Taiwanese company will take a 46.48 percent stake in Japan's most advanced LCD plant, while Sharp said its stake at the LCD production subsidiary will be reduced to less than 40 percent.
Sony Corp, which holds a 7 percent stake Sakai, said in March it had no plans to raise its holding, ending an earlier tentative agreement to invest more.
Cutting its stake in the factory, which cost more than $4 billion to build but was operating below its break-even capacity, would insulate the rest of Sharp from the losses.
In the quarter ending December 31, losses from Sakai contributed to a loss of about 180 billion yen in equity at the Osaka-based firm.
At the end of the three months, Sharp's net debt-to-equity ratio was 1.03, six times the industry average and the highest among Japan's electronics firms, according to Thomson Reuters data.
After revealing its revised expectation for a record loss, Sharp last month named company veteran Takashi Okuda as president, replacing Mikio Katayama, who became chairman.
Shares of Sharp, which have declined by 17 percent since the start of the year, dipped by 4.3 percent, against the Nikkei share average that ended down 0.1 percent.
DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.