TOKYO (Reuters) - Cash-strapped Sharp Corp will win approval from its banks as early as Thursday to secure as much as 210 billion yen ($2.7 billion) in fresh loans with a plan that commits the loss-making company to return to profit, a source at one of its main lenders said on Tuesday.
Sharp has already submitted its proposed revival plan which must outline how it will make a profit in the six months starting Oct 1 and beyond, the source told Reuters on condition he isn't identified.
The banks may yet seek revisions to that plan before agreeing to new lending, but ultimately are expected to approve new loans that Sharp needs to stay in business because by refusing to do so they risk having to write off Sharp's existing debts.
Sharp has to repay as much as 360 billion yen of short-term commercial paper loans and needs to secure financing from lenders led by Mizuho Financial Group and Mitsubishi UFJ Financial Group.
The maker of Aquos TVs has already mortgaged nearly all of its domestic offices and factories, including one that makes screens for Apple Inc's iPhone 5, to secure up to 150 billion yen of loans.
Sharp is predicting a net income of 15 billion yen in the 12 months to March 31, 2014, compared with a net loss of 250 billion yen projected for this year, Kyodo news reported on Tuesday.
Sharp and the two banks declined to comment.
The company's shares ended up 0.5 percent on Tuesday against the broader market's 0.25 percent rise. Sharp's shares are down nearly 70 percent so far this year, the biggest loser among constituents of the benchmark Nikkei index, which is up 7.5 percent.
JOB LOSSES RAISED?
Sharp, which has already committed to trimming 5,000 people worldwide, or about a tenth of its workforce, will raise job losses to around 11,000 while consolidating its domestic sales network and shrinking its solar panel business in a fresh bid to save money, Kyodo said.
The Japanese company earlier had said it was considering selling two of its overseas assembly plants, one in Mexico and one in China to fellow Apple Inc supplier Hon Hai Precision Industry Co.
The remaining two could be shuttered or also sold, analysts say. The four factories employ a total of 6,800 people. Other planned assets sales include its Tokyo headquarters.
As it scrambles for cost savings, the company is also asking its remaining workers to accept pay cuts of as much as a tenth of their salary.
As part its efforts to restructure, Sharp is in talks to sell Hon Hai a 9.9 stake, making the Taiwanese company its biggest shareholder. An agreement had been expected in August and talks have since stalled with Hon Hai asking for a management role in return for its cash.
Sharp has denied a local report that it is in talks to make Intel Corp its biggest shareholder instead, but sources have said it is in discussion to supply panels for ultra-thin laptops that typically use processors made by Intel.
Citing sources familiar with the Japanese TV maker's plan, Kyodo said Sharp was expecting an operating profit of 121.2 billion yen for the next business year. Sharp has forecast an operating loss of 100 billion yen for the current business year to next March.
(Reporting by Kubo Nobuhiro, Taiga Uranaka, Taro Fuse, Tim Kelly and Chang-Ran Kim; Editing by Edwina Gibbs and Muralikumar Anantharaman)
Thomas Sowell - Charlatans and Sheep
Yoo hoo, gun-grabbing Julianne Moore: 2 photos expose your hypocrisy
The Survival Mindset - Bearing Arms - Jeff Cooper, Training, Video
The truth about gun deaths: numbers and actual solutions
We Fill Our Culture with Garbage, and We Reap The Result | RedState
The War on America Turns 50 | Human Events
The New Norm?