Sharp jumps on revamp plan reports

TOKYO Fri Aug 17, 2012 5:47am EDT

A man looks at Sharp Corp's Aquos TVs displayed at an electronics store in Tokyo August 2, 2012. REUTERS/Yuriko Nakao

A man looks at Sharp Corp's Aquos TVs displayed at an electronics store in Tokyo August 2, 2012.

Credit: Reuters/Yuriko Nakao

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TOKYO (Reuters) - Shares of Sharp Corp (6753.T) jumped by as much as 13 percent on Friday on reports the struggling Japanese electronics maker was looking at various restructuring avenues to gain favor with its creditors for a capital boost.

Analysts have said Sharp, which has lost nearly $7 billion in market value since the start of January, has many profitable business parts it could sell for a sweeping revamp needed as a prerequisite for new loans from its creditors.

But senior bankers on Friday said there have been no indications of plans mentioned in local media being considered by the TV and display maker's leading banks. Sharp's two main lenders, units of Mizuho Financial Group (8411.T) and Mitsubishi UFJ Financial Group (8306.T), are poring over the company's restructuring plan to determine how much it needs to survive as it also renegotiates terms of an investment by Taiwan's Hon Hai Precision Industry (2317.TW).

The Nikkei business daily said on Friday that Hon Hai was looking to double its stake in Sharp to about 20 percent from a 9.9 percent agreed in March, and wants to pay about 200 yen per share, compared with the 550 yen initially agreed.

The Nikkei had earlier reported that Sharp was considering selling its copier, air-conditioner and LED businesses, with Kyocera Corp (6971.T), Daiwa House Industry Co (1925.T) and Daikin Industries Ltd (6367.T) among possible buyers or investors.

Sharp denied both reports, while a Hon Hai spokesman declined to comment.

Separately, the Jiji News Agency reported that Osaka-based Sharp was seeking a 50 billion yen ($630 million) capital increase, and is approaching U.S. investment funds, Kyocera, Toshiba Corp (6502.T), and others.

"It is true we are considering various matters for the recovery of our performance, and we will swiftly announce them if we make any decisions that need to be disclosed," Sharp said in one of its statements on Friday.

The reports drove up Sharp shares by as much as 13 percent, before closing up 5.1 percent at 184 yen.

Sharp, which makes screens for Apple Inc's (AAPL.O) iPad and iPhone, needs to refinance as much as 360 billion yen ($4.54 billion) of short-term commercial paper and will need a further 200 billion yen in September next year to cover a maturing convertible bond.

With debt totaling 1.25 trillion yen, anything outside of its core liquid crystal display (LCD) panel business could be put up for sale as Sharp looks for ways to raise cash and convince its lenders it's a viable business.

The last major fabricator of TV panels faces shrinking demand for its sets and lower than anticipated income for smaller LCD screens used in tablet PCs. Sharp and local rivals Sony Corp (6758.T) and Panasonic Corp (6752.T) expect to sell around 10 million fewer TV sets this business year than in the previous 12 months as nimbler competitors such as Samsung Electronics (005930.KS) gain market share.

Local media have reported Sharp was asking for more than 100 billion yen for its solar panel plant in Sakai, western Japan, as part of an asset sale, and a company source told Reuters that the maker of Aquos TVs may also sell its buildings in Tokyo as well as TV assembly plants in Poland, Malaysia, and Mexico.

Sharp, named after a mechanical pencil invented by its founder, is also considering spinning off its Kameyama plant, which makes LCD screens, media reported on Friday.

Sharp also holds marketable securities in medical equipment maker Olympus Corp (7733.T), flash memory chip maker Toshiba, audio-visual equipment maker Pioneer Corp (6773.T) and unlisted Eliiy Power Co, a lithium-ion battery joint venture.

($1 = 79.2650 Japanese yen)

(Reporting by Tokyo Newsroom, Clare Jim in Taiwan, Balaji Sridharan in Bangalore; Editing by Ryan Woo and Ian Geoghegan)

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