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[TOKYO] Sharp Corp plans to ask a government-backed investment fund to help finance the spinoff of part of its liquid-crystal display business, said a person familiar with the plan.
The Osaka-based television maker and display supplier to Apple Inc is seeking investment from Innovation Network Corp. of Japan to form a subsidiary making LCD panels used in smartphones and tablet computers, the person said, asking not to be named as the proposal hasn't been made public. The move will make it easier to track performance and make faster decisions, the person said.
Sharp, headed for a third loss in four years, has said it's considering "drastic reform" as it prepares a management plan for release in May. Talks on investment by Foxconn Technology Group have foundered, and bets against the company's shares rose to the highest level since 2013 last month as the debt-strapped maker of Aquos TVs considers whether to continue rescue talks with Taipei-based Foxconn.
Shares of Sharp rose as much as 6.9 per cent, the biggest gain on an intraday basis since Nov. 4.
The company will ask INCJ to invest 100 billion yen (S$1.1 billion) in an LCD spinoff, the Nikkei newspaper reported on Sunday, citing people it didn't identify. The Yomiuri newspaper on Saturday reported Sharp aims to shift LCD operations into a separate company.
Innovation Network, also known as INCJ, is the largest shareholder in Japan Display Inc, which also supplies screens for Apple's mobile devices. INCJ owns a 36 per cent stake after forming the company from panel operations spun off by Sony Corp, Hitachi Ltd and Toshiba Corp.
The government provides most of the funding for INCJ, which also gets support from companies, which take smaller stakes in INCJ projects such as Japan Display.
Sharp is considering various options for its LCD business and hasn't yet made any decisions, said Yoshifumi Seki, a Tokyo-based spokesman for the company.
A representative for INCJ wasn't immediately available to comment.