TOKYO: Loss-making Japanese electronics maker Sharp Corp may spin off its LCD panel business and seek funding for it from the government-backed Innovation Network Corporation of Japan (INCJ), a source familiar with the plan said yesterday.
The Nikkei business daily earlier reported that the LCD unit, which supplies displays to smartphone and tablet manufacturers, will be spun off in the current fiscal year and that INCJ could invest ¥100 billion (RM3.02 billion) in the new entity.
The source said Sharp, as part of its restructuring plan, wants to keep a majority in the LCD unit, and that details of an INCJ stake have not been decided.
A Sharp spokesman, while confirming the company was considering various reforms for its LCD business, said no decision had been made.
Sharp, on track for its third annual net loss in four years, has been trying to negotiate its second major bailout since 2012, with the company promising restructuring in return for new funds.
Sources say its main lenders Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ are seeking a radical overhaul and an exit from loss-making businesses. Mizuho Bank is a unit of Mizuho Financial Group Inc and Bank of Tokyo-Mitsubishi UFJ is part of Mitsubishi UFJ Financial Group Inc. — Reuters
This article first appeared in The Edge Financial Daily, on April 6, 2015.