Sharp Jumps on Credit Line, IPhone Supply Reports: Tokyo Mover
Sharp Corp. (6753), the unprofitable maker of Aquos televisions, surged to a 10-month high in Tokyo trading after media reports it will get an increased credit line from lenders and supply Apple Inc. (AAPL)’s new iPhone.
The stock surged as much as 11 percent to 385 yen, the highest level since July 4, before trading at 369 yen as of the midday break. Sharp will get a credit line of 150 billion yen ($1.5 billion) from lenders, the Nikkei newspaper reported. Details will be set this week, two people familiar with the matter said. The company will produce screens for the iPhone starting in June, Nikkan Kogyo said. The electronics maker will set an operating profit target of as much as 140 billion yen, Sankei reported.
Sharp, which has 200 billion yen of convertible bonds due this year, has been seeking investments from rivals and selling assets as its cash pile shrinks amid continued losses in its liquid-crystal-display business. The Osaka-based company, which is due to release its mid-term plan on May 14, has 360 billion yen of loans due June 30.
“These reports are positive for Sharp’s financing and production,” said Keita Wakabayashi, an analyst at Mito Securities Co. “But the news is not enough to solve the problem Sharp encounters. The market simply reacted to the positive news.”
Mizuho Financial Group Inc. (8411) and Mitsubishi UFJ Financial Group Inc.’s banking units will set up the new credit line, which is higher than a previous 100 billion-yen plan, Nikkei said without attributing the source of the information. The funds will help the company repay the bonds while the banks will extend deadlines for the loans due in June, the newspaper reported.
Sharp will start producing LCDs for Apple’s new iPhone as early as June, Nikkan Kogyo reported, without saying where it got the information.
The 2015 operating-profit target for Sharp will be set between 130 billion yen and 140 billion yen, Sankei reported, without saying where it got the information.
The company isn’t the source of the report on its mid-term plan, Sharp said in a statement. Sharp isn’t in a position to comment on lenders’ plans, spokeswoman Miyuki Nakayama said by phone, declining to comment on the Apple supply report. Steve Dowling, a spokesman for Apple, didn’t return a call seeking comment.
To contact the editor responsible for this story: Michael Tighe at firstname.lastname@example.org