Sharp Corp. (6753), the Japanese TV maker cutting more than 10,000 jobs as it tries to return to profit, secured 360 billion yen ($4.6 billion) of funding, according to a statement to the Tokyo Stock Exchange today.
Sharp will get a 180 billion yen loan from Mizuho Corporate Bank Ltd. and the Bank of Tokyo-Mitsubishi UFJ Ltd., according to the statement. Another 180 billion yen in the form of a revolving credit facility due in June will also be extended to Osaka-based Sharp, the statement said.
Reeling from record losses and in talks to sell a stake to Taiwan’s Foxconn Technology Group, the maker of Aquos televisions submitted cost-cutting proposals to the banks on Sept. 24, two people with knowledge of the matter told Bloomberg earlier this week. The company had 706 billion yen of short-term debt and 314 billion yen in long-term debt with cash and near- cash of 218 billion yen at the end of June.
Both loans have a claim on Sharp’s assets and the revolver replaces a 150 billion yen credit arrangement put in place last month, a person familiar with the matter said yesterday. Sharp used a stake in Pioneer Corp. (6773) and its company headquarters as collateral for the 150 billion yen loan, Tokyo-based spokeswoman Miyuki Nakayama said by telephone yesterday.
Japan’s biggest maker of liquid-crystal panels has already put up its Osaka headquarters and some factories as debt collateral, Sharp said Sept. 6. Its credit rating has been cut to junk by Standard & Poor’s and Moody’s Investors Service.
Sharp reduced its stake in Pioneer to 9.2 percent from 14.3 percent and pledged 15 million Pioneer shares each to Mizuho and Bank of Tokyo-Mitsubishi UFJ as collateral, according to a Sept. 3 filing to Japan’s Finance Ministry.
Falling demand for televisions and Japan’s stronger yen prompted Japan’s largest maker of liquid-crystal displays in August to widen its projected loss for the year ending March 2013 eightfold to 250 billion yen, compared with a 30 billion yen loss estimate three months earlier.
That projection has helped push the stock 71 percent lower for the year. The shares fell 0.5 percent to 198 yen as of 9:52 a.m. in Tokyo trading today. Sharp’s 200 billion yen of convertible bonds due Sept. 30 next year rose 1.5 percent to 70 yen for 100 yen face value.
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