Sharp to Sell New Shares for Up To 200 B. Yen

June 6, 2018

Osaka- Sharp Corp. said Tuesday that it will publicly issue new common shares worth up to 200 billion yen, planning to use most of the proceeds for buying back dividend-heavy preferred shares allotted to two major Japanese banks.

The electronics maker did not announce a schedule for the new share placement. The rest of the proceeds will be used for equipment investment and to cover research and development costs.

The company issued preferred shares worth 100 billion yen each to Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ, now MUFG Bank, as part of its efforts to weather a management crisis after it incurred a huge group net loss in the year to March 2015 due to a slump of its mainstay liquid crystal display business.

Sharp's earnings began to recover after it came under the umbrella of Taiwan's Hon Hai Precision Industry Co. in 2016. In the last business year, it posted the first net profit in four years, resuming dividend payments.

The preferred shares, however, are now posing a large financial burden on Sharp as it has to pay larger dividends on them than on common shares.

Sharp plans to buy back the preferred shares from the two banks for a total of some 185 billion yen. Jiji Press