Sharp Corp, fresh from the capital infusion from rival Samsung Corp, still has a long way to go to get back in to the black. It is now in the process of seeking loan financing to help in the repayment of a US$2.1 billion convertible bond issue falling due on September.
After the purchase of a 3% stake for US$111 million by Samsung, there are no further equity deals available in the pipeline. This situation was confirmed by three individuals familiar with the matter. This was confirmed by an executive at Sharp by saying, "With Samsung, the tie-ups in panels are over. I doubt there will be any more."
This Samsung purchase followed an agreement sealed with Qualcomm Inc for US$120 million inked last December. Sharp has admitted that without any external help, it would not be able to survive on its own. Plans are being done to sell off its TV assembly plant in China to the Lenovo Group while its Mexico factory is to be offered to Hon Hai of Taiwan. All these are being done to accumulate funding for the payment of the bonds.
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