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With a debt of ¥1.25 trillion (US$16 billion), Japanese electronics manufacturer Sharp Corporation has been feeling the weight on its shoulders and will submit an asset report to its banks next month in order to identify any flagging businesses it could sell to raise some finance, Reuters revealed.
The report is being compiled by two consultants, one of which is PricewaterhouseCoopers. It will look into what Sharp is worth and what it owns before advising the company on what it should sell — including advice on its flagging solar division. Until the report is ready, Mizuho Financial Group and Mitsubishi UFJ Financial Group will provide several tens of billions of yen in stopgap financing.
Earlier this month, the company recorded a quarterly loss of ¥138.4 billion (US$1.76 billion). Moreover, sales within its solar cells segment fell by 18.2% to ¥41.9 billion (US$534 million) compared with the same period one year earlier, generating an operating loss of ¥6.9 billion (US$57.5 million).
On the back of the announcement of the lackluster results, local media reports claimed that Sharp is in talks to sell its state-of-the-art manufacturing complex in Sakai, Japan, which houses a silicon thin-film manufacturing plant. The asking price reached to more than ¥100 billion. However, Sharp was quick to refute the rumour but with an asset report being conducted, this may become a reality.
The rumours started after Sharp revealed that the negative results had forced the company to undertake major restructuring. Its Solar Systems Group will be merged into its Health and Environmental Systems Group and renamed the Health, Environment and Energy Solutions Group. Administration and headquarter functions of its Solar System Group, which currently operate out of its Katsuragi solar plant, are to be relocated to its advanced LCD and solar production site in Sakai, Osaka. Furthermore, the company’s 160MW a-Si thin-film-based Katsuragi solar plant will also scale-down operations going forward.
Following such sale rumours, Sharp’s shares surged by 13% on Friday but on Monday they dropped by 5.4% to ¥174 per share, Reuters reported.