Sharp shares jump on Intel investment

Shares of the electronics company Sharp have jumped, following media reports that the chip maker Intel could invest as much as 40bn yen (£315 million) in the loss making manufacturer.Sharp shares jump on Intel investmentIts shares rose as much 9% to 165 yen on the Tokyo Stock Exchange.

Sharp has been trying to restructure its business amid mounting losses and falling sales.

However, it has found it tough to raise money after its credit rating was cut to “junk” status earlier this year.

When a firm’s bonds are rated as “junk”, or high risk, some institutions and investors may no longer invest in it, making it even harder for the company to raise fresh capital.

Sharp, like many other Japanese electronics makers, has been hurt by a slowing demand for TVs, which coupled with falling prices and a strong yen has hurt its profitability.

Earlier this month, the electronics maker issued a warning about its survival, as it forecast a loss of 450bn yen for the financial year, ending 31 March 2013.

In an effort to revive its fortunes, the company has been looking for potential investors.

In March, it agreed a deal to sell a stake of about 10% to Taiwan’s Hon Hai Precision Industry, for $800 million. However, that deal is yet to be concluded.

Sharp’s shares have plunged nearly 70% since then and there are concerns that the deal may not happen at all.

The concensus of opinion is that Sharp will need to raise capital quickly to secure its future.

November 26, 2012  Tags: , , , ,   Posted in: Business Sales, Business Win, Exporting Businesses, Global Business, Growing Sales, Share Floatation, Technological Businesses, Uncategorized

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