Japan's loss-making Sharp says banks to provide US$1.7b bailout

[TOKYO] Japan's loss-making Sharp Corp said it had secured a US$1.7 billion bailout from banks, its second major rescue in three years, after its smartphone display business came under intense pricing pressure from Asian rivals.

Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ will inject a combined 200 billion yen in a debt-for-equity swap, Sharp said in a statement, a move that will buy it time but is unlikely to allay worries about the long-term viability of its display business.

A corporate turnaround fund, Japan Industrial Solutions, will also provide 25 billion yen in funding, the company said.

In return, Sharp will embark on further restructuring that will include cutting 10 per cent of its global workforce, including about 3,500 jobs in Japan.

It reported a net loss of 222.35 billion yen (S$2.46 billion) for the past financial year, its third loss in four years.

REUTERS