Sharp offers up properties to get loans

The beleaguered Japanese company is putting up its Japanese properties, including its Osaka headquarters, as collateral to secure 150 billion yen (US$1.9 billion) to pay off its short-term debt.
Written by Jamie Yap, Contributor

Sharp has put up most of its properties in Japan, including its Osaka headquarters, as collateral to secure new bank loans to stay afloat while saddled with short-term debt.

On Friday, Japan Times reported Sharp spokesperson Miyuki Nakayama as saying: "It is true we put up the collateral for a maximum of 75 billion yen (US$951 million) in loans from each of the banks."

The flagship Kameyama plant in western Japan, which makes display screens for Apple iPhones, and its Osaka office were among the properties Sharp has offered to the banks. Nakayama said it was putting up other buildings and offices in Japan as collateral too, but did not specify them, the report noted.

Japan Times said Sharp plans to use the fresh bank loans to pay off its short-term debt. Its bank creditors, Mizuho Corporate Bank and Bank of Tokyo Mitsubishi UFJ, have called on Sharp to take drastic steps to turn around its loss-making business as soon as possible, it added.

Doubts over Sharp's future have grown after its agreement to sell a 9.9 percent stake for US$800 million to Taiwanese electronics manufacturer Hon Hai met with various obstacles.

Last month, for example, Taiwan's Ministry of Economic Affairs returned Hon Hai's application for the deal, citing insufficient details regarding the investment efficiency of the buy-in it considered a "little pricey". Hon Hai Chairman Terry Gou also failed to finalize an agreement when he visited Japan two weeks ago, after which the Japanese company said it may have to reduce the per-share sale price of the stake in order to complete the deal.

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