Sharp Corp. (6753), Japan’s biggest maker of liquid-crystal displays, fell the most in five days in Tokyo trading on reports the company may eliminate more jobs and seek investments from companies other than Foxconn Technology Group.
The shares dropped as much as 4.9 percent to 175 yen and changed hands at 177 yen as of the 11:30 a.m. trading break, extending the loss this year to 74 percent. Sharp is the worst performer in the Nikkei 225 (NKY) Stock Average this year.
The maker of Aquos TVs may cut 10,000 jobs, or about 20 percent of its workforce, the Mainichi newspaper reported Aug. 18 without citing anyone. That’s double the 5,000 job cuts announced earlier this month by Sharp. The Osaka-based company isn’t considering additional job cuts, Miyuki Nakayama, a spokeswoman, said today.
Sharp is considering seeking investment from firms other than Foxconn (2354) to raise 50 billion yen, Jiji Press reported Aug. 17, without saying where it obtained the information. Sharp may ask a U.S. investment firm, Kyocera Corp. (6971) and Toshiba Corp. (6502) for funds, the report said.
Sharp has offered to sell its TV plants in China and Mexico to Foxconn, the Taiwanese company said Aug. 17. Foxconn, which agreed in March to an equity alliance with Sharp, said earlier this month it plans to renegotiate the price of its investment from the 550-yen-a-share it agreed to in March. The shares have plunged after Sharp widened its annual loss forecast.
“The stock may continue to attract sell orders without updates on the March agreement,” Nobuo Kurahashi, an analyst at Mizuho Financial Group Inc., said from Tokyo. “There hasn’t been any progress on the talks with the Taiwanese company about the proposed investment. Investors are waiting to see the investment to be carried out.”
Negotiations between the two companies are continuing, Nakayama said.
“Sharp and Foxconn group are having various discussions, including the stock price and business alliances,” she said. “The discussions are held at various levels and we cannot disclose details.”
Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc., Sharp’s main lenders, will offer more than 60 billion yen in loans, Japanese public broadcaster NHK said Aug. 17. The two Japanese banks may add financial support to Sharp if the electronics maker draws up a drastic reform plan, NHK said, without citing anyone.
To contact the editor responsible for this story: Michael Tighe at email@example.com