Sharp Corp. (6753), the Japanese electronics maker renegotiating a stake sale to Foxconn Technology Group, rose in Tokyo trading after the Mainichi newspaper said it was in talks with Intel Corp. (INTC) for a possible capital tie-up.
The shares jumped as much as 8.4 percent to 219 yen, the biggest gain since Sept. 4, and traded at 211 yen as of 10:30 a.m. in Tokyo. Japan’s benchmark Nikkei 225 Stock Average climbed 0.3 percent.
Sharp, Japan’s largest maker of liquid-crystal displays, may agree with Santa Clara, California-based Intel as early as next month to receive at least 30 billion yen ($383 million) from the world’s largest semiconductor maker, the Mainichi newspaper reported, without citing anyone. The companies may collaborate in the smartphone business, the report said.
Sharp’s September 2013 convertible bonds gained 4.8 percent to 66 yen per face value of 100 yen as of 10:30 a.m., heading for the biggest daily gain since Aug. 17.
“Sharp’s financing issue has been the center of attention and the report led to an expectation that may improve,” said Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo. “Nevertheless, even if the report is true, the amount reported isn’t enough to solve Sharp’s debt problem. The rally probably won’t last.”
The maker of Aquos televisions has been renegotiating terms for the proposed stake sale to Taipei-based Foxconn after Osaka- based Sharp widened its full-year loss forecast eightfold in August, triggering a slide in its shares. Foxconn agreed with Sharp in March to invest 67 billion yen for a 9.9 percent stake in the TV maker at 550 yen a share.
Sharp President Takashi Okuda is cutting 5,000 jobs and has put up properties as collateral to raise funds as the company projects a second consecutive annual loss. The company plans to return to profit next fiscal year with the help of job cuts and cost reductions, Okuda told employees last week.
The company is considering a target of 30 billion yen net income for the year starting April 1, Kyodo News reported, without citing anyone.
Sharp is working on a contingency plan to present to banks as the company faces a deadline for repaying debt, it said Sept. 7. The electronics maker has turned to its lenders for financial support as commercial papers come due and 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. Sharp’s cash and near-cash stood at 218 billion yen at the time.
To contact the reporter on this story: Mariko Yasu in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Tighe at email@example.com