Sharp Corp was founded in 1912 and named after the ‘Ever-Sharp mechanical pencil’ invented by Tokuji Hayakawa, founder of the company. Sharp is a leading electronic group and is one of the world’s biggest television makers.
Troubled Sharp Corp plans big job cuts and asset sales
Japanese television maker to sack 10,966 and sell factories in attempt to repay lenders and rebound from record losses
Bloomberg in Tokyo
Sharp plans to cut more than 10,000 jobs, or about 18 per cent of its workforce, and is in talks to sell plants as the Japanese television maker tries to return to profit, two people with knowledge of the proposal say.
The job cuts and sales of television factories in Mexico, China and Malaysia and United States solar developer Recurrent Energy were part of a plan the company presented to its lenders on Monday, the people said, declining to be identified because the matter is not public.
Sharp was talking to Taiwan's Foxconn Technology Group to dispose of the three plants, they said.
Sharp, reeling from record losses and facing hurdles in selling shares to Foxconn, submitted the proposals to its main banks Mizuho Financial Group and Mitsubishi UFJ Financial Group, seeking support on refinancing its commercial paper and other debt, two people said.
The banks would contribute to a total of about 360 billion yen (HK$35.9 billion) in loans.
Miyuki Nakayama, a spokesman for Sharp, declined to comment.
Resona Holdings and Nippon Life Insurance might join in providing loans, one of the people said.
Kyodo News reported that Sharp would cut 10,966 jobs and raise 213 billion yen by selling assets, including overseas factories and shares in Toshiba.
The job cuts include the 5,000 announced by the company last month.
Sharp aimed to raise 38 billion yen from selling the plants, 25 billion yen from Recurrent Energy, 3 billion yen from its Tokyo office building and 1.6 billion yen from its Toshiba stake, Kyodo said.
Foxconn's flagship Hon Hai Precision Industry was not available for comment.
Sharp has put up properties including its headquarters as collateral to raise funds. The maker of Aquos televisions has turned to lenders for financial support as it struggles to refinance its debt after Standard & Poor's and Moody's Investors Service cut its credit ratings to junk.
The company had 706 billion yen of short-term debt maturing within 12 months and 314 billion yen in long-term debts at the end of June, according to its latest quarterly financial statement.
Cash and near-cash stood at 218 billion yen at the time.
The electronics maker has been renegotiating terms for a proposed stake sale to Taipei-based Foxconn after widening its full-year loss forecast eightfold last month, triggering a slide in its share price.
Foxconn agreed in March to invest 67 billion yen for a 9.9 per cent stake in Sharp at 550 yen a share.
The shares closed unchanged at 207 yen and are down 69.2 per cent so far this year.
Sharp planned to return to profit in the next financial year with the help of job cuts and cost reductions, president Takashi Okuda said this month.
The company said it planned to trim its workforce and reduce wages, managers' salaries and bonuses to lower costs by 14 billion yen.
The cuts are in addition to a 100 billion yen reduction in fixed costs it announced last month.
Sharp had 56,756 employees at the end of March.