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Japan state fund offers 200 bln yen to help save Sharp -report

TOKYO, Jan 11 (Reuters) - Japanese government-backed fund has offered to invest 200 billion yen ($1.71 billion) to help bail out electronics maker Sharp Corp, the Nikkei business daily reported on Monday.

The Nikkei report said Sharp would also seek 150 billion yen in existing loans from lenders to be converted to preferred shares in a debt-for-equity swap.

The news follows a Reuters report that said the fund, the Innovation Network Corporation of Japan (INCJ), planned to invest in Sharp with the intention of splitting off its display division and merging it with rival Japan Display Inc, a company in which the fund is the biggest shareholder.

A Sharp spokesman said it was still in the process of weighing various options and had not made any decisions. INCJ officials were not available to comment on the matter on Monday, a public holiday in Japan.

Sharp has also received an investment offer from Taiwan’s Hon Hai Precision Industry Co Ltd, also known as Foxconn, people with knowledge of the matter said last month. These sources have also cited private equity interest, and the Nikkei previously named U.S. buyout fund KKR & Co as a potential investor.

Despite a $1.7 billion rescue in May, Sharp’s second major package in three years, the company has shown few signs of a turnaround.

It and other Japanese consumer electronics makers have lost market share over the past decade to the likes of Samsung Electronics Co Ltd and more nimble Asian rivals.

Sharp’s main creditors are Mitsubishi UFJ Financial Group Inc subsidiary Bank of Tokyo-Mitsubishi UFJ, and Mizuho Financial Group Inc’s Mizuho Bank. ($1 = 117.1700 yen) (Reporting by Makiko Yamazaki and Ritsuko Ando; Editing by Miral Fahmy)