According to people familiar with the matter, Sharp plans to find more partners to invest in the LCD panel factory in Handan City, Japan, in order to divest the LCD panel manufacturing business.
In March, Sharp agreed to issue 66.9 billion yen (about 820 million US dollars) of shares to Hon Hai, making Hon Hai's shareholding in the company reach 11%. People familiar with the matter said Sharp has invited suppliers such as Toppan Printing and Dai Nippon Printing to invest in the Bengbu factory.
As part of Sharp's cooperation with Hon Hai, the latter will hold 46.48% of the shares in the plant. Sony, which holds 7% of the plant, said last month that it is not prepared to further increase its stake.
Due to oversupply, the price of the panel was suppressed, resulting in a loss in the Bengbu factory. Cutting the stake in the factory, which cost more than $4 billion, will ease Sharp’s loss pressure.
According to Nikkei Industry News, Sharp’s net loss may reach a record 390 billion yen ($4.79 billion) in the fiscal year ending March 31, up from the estimated 290 billion yen in February. .
Sharp executives declined to comment on the loss report.
In the fiscal quarter ended December 31 last year, Sharp had a loss of approximately 180 billion yen from the Bengbu factory. As of the end of the quarter, Sharp's net asset-liability ratio was 1.03, which is six times the industry average, ranking first among Japanese electronics companies.
After modifying the loss forecast, Sharp last month appointed the company veteran Oda Takashi as the new president, and the former president, Katayama, will be the chairman.
Sharp's share price has fallen 17% this year, and the stock fell 3.3% on the Tokyo Stock Exchange earlier today.
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