Sharp Considering Ways to Raise Capital Amid Share Sale Report

Sharp Corp., Japan’s largest maker of liquid-crystal displays, is considering ways to raise capital after Nikkan Kogyo newspaper reported it plans to raise 100 billion ($1 billion) through share sales this year.

No decisions have been made on capital, the Osaka-based company said in a statement today. Sharp may sell 70 billion yen of stock through a public offering and also sell shares to other companies, Nikkan Kogyo reported without attribution.

Sharp, which reports first-quarter earnings today, has cut jobs and sold stakes to Samsung Electronics Co. and Qualcomm Inc. to raise cash after posting 921 billion yen of losses in the past two financial years. The Japanese electronics maker is in talks with Denso Corp. to invest as much as 2 billion yen, a person familiar with the plans said July 23.

“If Sharp is really doing a public offering, it should be a sell,” said Toshikazu Horiuchi, a market analyst at Iwai Cosmo Holdings Inc. in Tokyo. “There are clouds over Sharp amid concerns about outlook for Samsung, which is essential for Sharp.”

The 100-year-old company, which supplies screens for Apple Inc., has said LCDs will remain a core business and the unit will probably turn an operating profit of 30 billion yen this fiscal year after losing 139 billion yen in the year ended March.

Sharp shares rose 3 percent at 9:58 a.m. in Tokyo trading. The stock is up 37 percent so far this year, compared with a 33 percent gain by Japan’s benchmark Topix index.

In May, the company said it had an informal agreement with lenders Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. to continue 360 billion yen of loans. The company agreed to get a 150 billion-yen loan from lenders to redeem convertible bonds, Tetsuo Onishi, Sharp’s senior executive, said at the time.

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