Sharp Corporation is studying plans to expand its capital base by more than 100 billion yen (US$1.15 billion) which could include a public offering and subordinated loans.
The Daily Yomiuri on Thursday, citing sources familiar with the matter, the consumer electronics company has entered consultative talks with its two main banks--Mizuho Corporate Bank and the Bank of Tokyo-Mitsubishi.
The raised funds will be used to bolster the manufacturing of its main liquid crystal display panel manufacturing business line.
It will also help shore up Sharp's financial position amid the decline in its capital adequacy ratio, which is a measure of its management soundness, the report noted. The banks want Sharp to enhance that ratio to above 10 percent from the expected 8 percent for end-March.
The company plans to incorporate its capital expansion plan in a medium-term management plan, which it is likely to unveil in February, the sources added.
This would be the latest effort by the ailing Japanese electronics company to revive its fortunes, as it charge in restructuring costs.
, compared with a 30.1 billion yen (US$376 million) profit in the previous year. This included a 84.4 billion yen (US$1.1 billion)
In December, Sharp said it hasto jointly develop and commercialize display panels.