Sharp Corp., the Japanese TV maker which said in November there was “material doubt” about its ability to survive, is poised to get lenders’ approval to extend the maturity of debt due June as its revenue recovers, a person with direct knowledge of the matter said.
Mizuho Corporate Bank Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd. are set to extend the maturity of 360 billion yen ($4 billion) of loans due June 30, said the person, asking not to be identified because the details are private. A final decision will be made in March on the condition the company makes an operating profit for the six months to March 31 and forecasts a net income for the next fiscal year, the person said.
Sharp, which is facing back-to-back annual losses, hemorrhaged 103.8 billion yen in cash from operations in the fiscal first half amid falling demand and competition from Samsung Electronics Co. The 100-year-old inventor of mechanical pencils is selling assets and cutting jobs to revive profit after posting a record 376 billion-yen loss last fiscal year.
“The 360 billion yen facility is subject to negotiations with the financial institutions,” Heihachiro Ochiai, a spokesman for Sharp, said in a telephone interview from Osaka today, declining to give further details. “We are considering various options to strengthen our capital base.”
Revenue in September, October, November and December each surpassed year-earlier results due to higher demand for liquid crystal display TVs and home appliances, coupled with a weaker yen, President Takashi Okuda said Jan. 7.
Sharp is considering ways to repay 200 billion yen of convertible bonds which mature Sept. 30, including doing a public or private share offering, or entering into bank loans, said the person.