Sharp mortgages iPhone display plant, other Japanese factories
09/06/2012| 02:37am US/Eastern
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Japan's embattled Sharp Corp (>> Sharp Corporation) has mortgaged nearly all of its domestic offices and factories, including one which makes screens for Apple Inc's (>> Apple Inc.) latest iPhone, to secure the fresh loans it needs to stay in business.
Japan's embattled Sharp Corp (>> Sharp Corporation) has mortgaged nearly all of its domestic offices and factories, including one which makes screens for Apple Inc's (>> Apple Inc.) latest iPhone, to secure the fresh loans it needs to stay in business.
Sharp, which is waiting for a cash injection from Hon Hai Precision Industry Co Ltd (>> Hon Hai Precision Industry Co., Ltd.), said it has offered the properties as collateral for up to 150 billion yen ($1.92 billion) of credit from Mizuho Financial Group Inc (>> Mizuho Financial Gr.) and Mitsubishi UFJ Financial Group Inc (>> Mitsubishi UFJ Fin.).
The set of properties includes "almost all the business sites owned by Sharp in Japan," said company spokeswoman, Miyuki Nakayama.
Its two main banks have agreed to help the junk-rated company pay as much as 360 billion yen in short term commercial paper, on the condition that it puts up assets to cover the debt should it default.
Aside from its headquarters in Osaka and offices in Tokyo, the maker of Aquos TVs operates 11 factories in Japan where it assembles TVs, and makes display screens, washing machines, air conditioners, and solar panels.
Among them is the Kameyama plant in western Japan, which makes small displays for Apple and other customers. The facility has just started shipping screens to Apple for a new iPhone which analysts expect it to reveal at a press event on September 12.
Pessimism about Sharp's future has grown since Hon Hai's chairman Terry Gou last week cut short a trip to Japan, leaving without meeting Sharp executives to conclude an expected agreement for the Taiwanese company to buy a 9.9 percent stake in Sharp in return for much-needed cash.
Sharp, which wants to finish those talks as soon as possible, has said it wants to send its president Takashi Okuda to meet Gou in Taipei.
Gou, however, is stepping up the pressure on Sharp to give him greater influence by demanding a management role in the century-old Japanese firm as part of the deal.
($1 = 78.3150 Japanese yen)
(Reporting by Tim Kelly; Editing by Daniel Magnowski)
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