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Sharp Secures 360 Billion Yen of Loans From Mizuho, MUFJ

Sharp Gets 360 Billion Yen of Funding From Mizuho, MUFJ
The Sharp Corp. headquarters in Osaka. 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. Photographer: Yuzuru Yoshikawa/Bloomberg

Sharp Corp., 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. 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.

Pledged Shares

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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