Sharp Mulls Selling New Shares to Raise Y100 Billion

TOKYO--Struggling Japanese electronics maker Sharp Corp. (6753.TO) is considering raising around Y100 billion through a public stock offering to help it repay Y200 billion in debt due in September, sources close to the matter said Friday, Kyodo News reported.

The company's main creditor banks, however, questioned the feasibility of the plan, pushing Sharp to consider other ways of raising capital such as reducing the amount of new share sales as well as issuing preferential shares or subordinate bonds, the sources said.

Rating agencies have cut Sharp's rating to levels considered speculative, which has made it difficult for Sharp to raise money through issuing new bonds.

The company has formed capital alliances with U.S. telecommunication giant Qualcomm Inc. (QCOM) and Samsung Electronics Co. (005930.SE) of South Korea, but receiving around Y10 billion in investment from each would not be enough.

As Sharp is facing difficulty obtaining a nod about the plan from the main creditor banks of Mizuho Corporate Bank and the Bank of Tokyo-Mitsubishi UFJ, it may have to postpone to April announcing its medium-term management plan, which is slated for March, the sources added.

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