The Japanese Company who are struggling to compete in a volatile TV market is desperate to raise additional capital with some analysts tipping that the Company could find it “hard” to raise an additional $2 Billion to keep the Company competitive “sending out positive vibes about the TV market does help their cause” said one analyst.
Recently Sharp started to cut back on large screen panel production as Samsung and LG strip market share from the struggling flat panel TV maker.
Sharp is aiming to launch the offering during the current financial year to March 2015 after carrying out restructuring at its flagship Kameyama LCD display factory and putting its earnings on a solid recovery path, the newspaper said.
No one at Sharp could be reached for comment in Australia or Japan.
The reported move comes after Sharp announced in February that it would beat a previous operating profit forecast for the financial year ended last month on the back of strong orders from Chinese makers for smartphone panels.
On a net basis, Sharp is forecasting a profit of five billion yen for the year just ended, which would mark a return to the black after losing a cumulative 921 billion yen over the previous two years amid fierce competition in the LCD market.
Sharp raised about 140 billion yen in the final months of 2013 but its equity ratio – a key measure of financial stability – stood at just 13 percent at the end of December, below the 20 percent threshold that is considered healthy.
There are many people, including some of Sharp’s bankers, that have voiced opposition to the move given that Sharp would be embarking on a large-scale equity financing two years in a row, the Asahi report said.
To seek the understanding of its stakeholders, Sharp aims to come up with a restructuring plan that will focus on shoring up the Kameyama plant in Mie Prefecture, which has struggled with big swings in operating rates, the newspaper said.
Sharp has been reducing output of large, TV-use LCD panels and shifting focus to smaller panels for high-end smartphones. The company is aiming to lower costs further so that it can tap into booming demand for lower-end models, the Asahi said.
There is a chance Sharp would not be able to raise the desired amount of funds from the market if its earnings and stock price languish, the Asahi said, adding that the company would look to make a decision on the share offering in 2014.
The Company said last week that the flat panel display industry is expected to see 5% annual growth from 2014-2017.
DigiTimes reports that between 1993 and 2013, the global flat panel display industry grew 20% a year, rising in value over 30 times from about US$4.1 billion to US$129 billion, the sources said.
However, the yearly growth percentage is expected to drop to 5% from 2013-2017, with the large-size panel segment expected to see 0% growth. Public displays are expected to see 10% growth while desktop displays will see 2% growth.
The small-size panel segment is expected to grow 10% during the period due to demand for tablets and smartphones. Flat panels used in digital cameras are expected to see a 57% decline while AV applications are expected to decline 50%. Growth in the vehicle segment is expected to reach 9% while panel growth in the notebook segment is expected to be flat.
Representatives at Sharp said the flat panel industry needs to work on new innovations and applications for displays in order to stimulate growth again.
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