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[April 15, 2014]
Sharp drops to five-month low on reports of £1.2bn share issue
(City A.M. (UK) Via Acquire Media NewsEdge) CONSUMER electronics firm Sharp saw shares slump yesterday morning after a local Japanese newspaper reported the company is considering issuing shares to raise around ¥200bn (£1.2bn) to bolster its finances.
The Osaka-based company said in a statement on Sunday that it was considering a variety of possibilities to boost its capital but had made no concrete decisions, adding that the report was not based on a release by the company.
"Sharp is considering various possibilities to boost its capital, but has not made any concrete decision yet," Sharp said.
Sharp's shares closed down 8.7 per cent at ¥273 in Tokyo following the report, but had fallen as much as 10 per cent overnight to a five-month low of ¥269.
The firm would reportedly aim to launch the offering during the current financial year to March 2015 after a restructuring of its flagship Kameyama LCD panel factory, with the intention of putting its earnings on a solid recovery path.
Sharp raised about ¥140bn in the final months of 2013 but its equity ratio - a key measure of financial stability - stood at just 13 per cent at the end of December, below the 20 per cent threshold that is considered healthy.
Sharp is forecasting a profit of ¥5bn for the year just ended, which would mark a return to the black after losing a cumulative ¥921bn over the previous two years.
(c) 2014 City A.M.
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