Sharp May Close Europe, U.S. Solar Units to Secure Financing Sources

Pubblicato su 27 set 2012

Japan's Sharp Corp has offered to shut its solar panel businesses in Europe and the United States as a further cost cutting measure to persuade banks to extend $2.7 billion of the fresh financing it needs to stay in business.

Lenders led by Mizuho Financial Group and Mitsubishi UFJ Financial Group are likely to approve a new batch of loans to prop up the ailing display maker as early as Thursday, sources earlier told Reuters.

That 210 billion yen of lending will be on top of 150 billion yen ($1.93 billion) of loans already made to Sharp, which has to pay as much as 360 billion yen of short-term commercial paper over the coming months.

Sharp's stock dipped 1.5 percent in early trading in Tokyo, compared with a 0.4 percent fall in the benchmark Topix index.

Sharp, which has already mortgaged most of its factories and offices in Japan, including one that makes displays for Apple Inc.'s iPhone and iPad, needs to convince banks it can end losses and return to profit in the next business year if it is to unlock additional financing.

In the business proposal submitted to lenders, Sharp predicts it can achieve an operating profit of 121 billion yen in the year beginning April 1, compared with an operating loss of 115 billion this term, the sources said on condition they were not identified.

As part of that, Sharp would shut module assembly plants, one in the U.S. and one in Britain, the sources said. The company would also need to dissolve a partnership with Italy's leading power producer Enel SpA, which last year opened a joint panel production plant.

Sharp also plans to consolidate production at several Japanese sites into one location.


source: Reuters
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