Japan's Sharp planning to seek aid from main lenders: source

[TOKYO] Embattled Japanese electronics maker Sharp is preparing to seek aid from its two main lenders, a source with direct knowledge of the matter said, as it expects impairment losses from unprofitable businesses to mount this year.

Shares in Sharp plunged more than 9 per cent in early trade.

Osaka-based Sharp last month warned it would slip into its third annual net loss in four years, saying a supply glut squeezed sales of smartphone displays in China, the business line it had counted on for growth. It had said it's rethinking its businesses.

Sharp is looking to request aid from Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ in a bid to shore up finances needed to restructure, the source told Reuters, declining to be identified because a formal decision has not been made.

The Nikkei business daily reported on Tuesday that Sharp's aid request included a 150 billion yen (US$1.25 billion) debt-for-equity swap.

With plans to write off production equipment in unprofitable businesses such as solar panels, Sharp's net loss is likely to widen to more than 100 billion yen in the financial year ending this month, compared with the company's forecast of a 30 billion yen loss, the Nikkei said.

The company said in a statement it was considering various options but that nothing was decided.

REUTERS