Sharp Corp. (6753), the Japanese TV maker seeking a return to profit, will sell 6 billion yen ($62 million) of stock to Qualcomm Inc. (QCOM:US) to complete the second part of a capital alliance for developing displays.
Sharp will sell 11.9 million shares for 502 yen each with payment to be completed June 24, the Osaka-based company said in a statement today. The first share sale of about 4.94 billion yen was completed Dec. 27.
Qualcomm, the largest seller of semiconductors for mobile phones, agreed in December to invest in Sharp, which is trying to restore its balance sheet amid record losses and dwindling demand for its TVs. The investment was conditional on developing a plan for mass producing its Micro Electro Mechanical System, or MEMS, displays and had been scheduled for completion March 29.
“The amount is very limited, but it has a positive effect in increasing Sharp’s credibility,” said Hideki Yasuda, an analyst at Ace Securities Securities Co. in Tokyo.
The U.S. chipmaker will be the third-biggest shareholder with a 3.53 percent stake, according to Miyuki Nakayama, a spokeswoman for Sharp. Mitsubishi UFJ Financial Group Inc., one of Sharp’s two main creditors, is the company’s biggest shareholder, data compiled by Bloomberg show.
Sharp is selling assets and has formed capital alliances with Qualcomm and Samsung Electronics Co. (005930) to raise funds. The company posted a 545 billion-yen loss in the year ended March 31 and has forecast that net income may reach 5 billion yen in the year started April 1.
Sharp stock, which has gained 32 percent so far this year, closed unchanged at 401 in Tokyo trading today.
Last month, the maker of Aquos TV released its midterm plan targeting net income of 80 billion yen and operating margin of 5 percent on 3 trillion yen in sales for the year to March 2016. The electronics maker will strengthen ties with large customers for liquid-crystal displays, focus on big-screen TVs and shrink its overseas solar business during the next three years to boost earnings, it said.
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