Rumour: Sharp to Sign Rescue Deal with Banks

Sharp has moved to deny the latest rumour concerning its future, that the loss-making company is about to sign a $1.7 billion rescue and restructuring plan with its main lenders, Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ.

According to a Nikkei report, the banks will jointly invest the $1.7 billion in a debt-for-equity swap, while Sharp will agree to cut 5,000 jobs, scale back its North American TV operations and consider spinning off its LCD unit.

The report claimed that while the LCD operations might be spun off to improve transparency and accountability, it would continue to be owned by Sharp for now. Analysts have speculated that a spin off could help pave the way to an eventual deal, such as a merger with rival Japan Display.

Sharp will release details of its new business plan in May.