Sharp Falls Amid Recovery Concerns, Slide in Japan’s Topix IndexGrace Huang and Pavel Alpeyev
Sharp Corp. fell the most in almost three months as reports about plans for further borrowing underscored concern that the company’s recovery path hasn’t been set.
The stock fell 5.8 percent, the most since Jan. 19, to 261 yen at the close in Tokyo. The shares earlier rose as much as 4.3 percent after the Nikkei reported that Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. agreed on a 200 billion yen ($1.7 billion) financing package.
Debt-strapped Sharp, headed for a third loss in four years, has said it’s considering “drastic reform” as it prepares a management plan for release in May. The shares got a boost last week after a person familiar with the matter said the company plans to ask a government-backed fund for help spinning off part of its liquid-crystal display business.
“The price dropped today due to the uncertainty for future recovery,” said Tsunenori Ohmaki, an analyst at Tachibana Securities Co. in Tokyo, said by phone “It is unclear what method Sharp would take to recover its financial performance.”
Sharp has been discussing options including a debt-for-equity swap with lenders, people familiar said in March. Mizuho and Mitsubishi UFJ lent the company 360 billion yen in September 2012, and 150 billion yen more the following year, according to its 2014 annual report.
Sharp may sell its Osaka headquarters, Nikkei reported Thursday. The company may also shut its plant in Tochigi prefecture, north of Tokyo, Kyodo news reported the same day.