Sharp Says Second Qualcomm Investment Delayed After Terms
Stock Chart for Sharp Corp/Japan (6753)
Sharp Corp. (6753), the unprofitable Japanese TV maker, said a second investment of about 5 billion yen ($53 million) from Qualcomm Inc. (QCOM) has been delayed because the companies failed to meet terms of their original agreement.
Sharp couldn’t develop production technology for its Micro Electro Mechanical System displays, so the payment scheduled to be made March 29 will be delayed, spokeswoman Miyuki Nakayama said by phone today. Sharp won’t have a liquidity problem because of the postponement, and the companies now are working toward a June 30 deadline, she said.
Qualcomm, the largest seller of semiconductors for mobile phones, agreed in December to invest 9.9 billion yen in Osaka- based Sharp, which is trying to restore its balance sheet amid record losses and dwindling demand for its TVs. The investment also is conditional on developing a plan for mass producing the displays and Sharp’s business becoming profitable, Nakayama said.
Emily Kilpatrick, a spokeswoman for San Diego-based Qualcomm, didn’t immediately respond to a voicemail message left outside normal business hours. The company didn’t immediately respond to an e-mail to its corporate communications department.
Sharp fell 1.6 percent to 310 yen as of 10:16 a.m. in Tokyo trading.
The first share sale of about 4.94 billion yen was completed Dec. 27.
Japan’s largest maker of liquid-crystal displays this month agreed to sell a stake to Samsung Electronics Co. as the company hasn’t concluded a proposed 67 billion-yen investment from Taiwan’s Foxconn Technology Group after almost a year of talks.
Sharp is selling assets and has formed capital alliances with Qualcomm and Samsung to raise funds after posting a 376 billion-yen net loss in the year ended March 2012 amid slumping demand for its televisions and display panels. The company is forecasting a 450 billion-yen loss for the year ending March 31 and has 200 billion yen in debt maturing Sept. 30.
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