Bloomberg News

Sharp to Get 30 Billion Yen in Loans From Three Banks

March 13, 2013

Sharp Corp. (6753), the Japanese electronics maker struggling to recover from a record loss, will get 30 billion yen ($313 million) in loans from three banks this week, three people familiar with the matter said.

Resona Bank Ltd., Mizuho Trust & Banking Co. (8411) and Mitsubishi UFJ Trust & Banking Corp. will each lend 10 billion yen, the people said, asking not to be named as the agreement is private. The banks will join a 360 billion-yen syndicated loan set up by Sharp’s main lenders Mizuho Corporate Bank Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd., which matures at the end of June, with the total amount remaining unchanged, the people said.

Sharp is selling assets and has formed capital alliances with Qualcomm Inc. (QCOM:US) and Samsung Electronics Co. (005930) to raise funds after posting a 376 billion-yen net loss in the year ended March 2012 amid slumping demand for its televisions and display panels. The company is forecasting a 450 billion-yen loss for the year ending March 31 and has 200 billion yen in debt maturing Sept. 30.

“It can be interpreted as a sign of a more supportive stance” by lenders, said Takao Matsuzaka, a Tokyo-based credit analyst at Daiwa Securities Co. “The collaboration on panels between Samsung and Sharp may have enhanced Sharp’s reputation among lenders.”

Miyuki Nakayama, a spokeswoman for Sharp, declined to comment on agreements with specific lenders.

“We are hoping to get as many financial institutions as possible to join the syndicated lending initiated by our main banks,” she said today by phone.

Samsung, Qualcomm

Kensuke Suzuki, a spokesman for Mitsubishi UFJ Trust in Tokyo, declined to comment on the loan agreement. Shinya Morita, a spokesman for Resona, and Michio Nagano, a spokesman for Mizuho Trust, also declined to comment.

The loan agreement was reported yesterday by Kyodo.

Sharp said March 6 it agreed to sell 10.4 billion yen of stock to Samsung. The Suwon, South Korea-based company, the world’s largest maker of TVs and smartphones, said the investment will secure a supply of liquid-crystal displays from the Japanese manufacturer.

In December, Sharp turned to Qualcomm, the biggest maker of mobile-phone semiconductors, for as much as 9.9 billion yen in new capital. The U.S. chipmaker has so far invested 4.9 billion yen as part of the two-step transaction.

Sharp is also seeking an investment from Taiwan’s Foxconn Technology Group, founded by billionaire Terry Gou, which initially agreed in March 2012 to buy a 9.9 percent stake for 550 yen a share. The deal floundered after Sharp’s stock plunged for seven straight months, reaching last year’s low of 143 yen on Oct. 17.

Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ are set to extend the due date of the 360 billion-yen loan package from June 30, a person with direct knowledge of the matter said in January. The company must turn to an operating profit in the second half and forecast a net income next fiscal year to receive the funding, the person said.

Sharp pledged as collateral a total of 741 billion yen in assets as of Sept. 30, up from 19 billion yen six months earlier, according to its quarterly report.

To contact the reporters on this story: Emi Urabe in Tokyo at eurabe@bloomberg.net; Shingo Kawamoto in Tokyo at skawamoto2@bloomberg.net; Monami Yui in Tokyo at myui1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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