At bay, Sharp wants to become an SME – Les Echos

Mistreated for months, the action Sharp collapsed Monday at the Tokyo Stock Exchange, the Japanese media saying that the multinational would proceed with a reduction of 99% of its capital to return to the level of an SME and try to avoid bankruptcy.

The situation seems increasingly desperate Sharp, the former glory of the high- Japanese tech. The title of this national treasure has shrunk by 26.35% to close at 190 yen, after having unscrewed from 31% in early morning, something not seen in over 40 years: he could not fall lower during the Monday’s session under the rules of the market. .

Investors panicked after hearing the Japanese media report over the weekend that the group would attempt a desperate maneuver to try to raise. According to the Nikkei, Sharp will proceed in the coming weeks to an exceptional reduction of its capital to fall back to a level similar to that of an SME. It could then benefit from special tax advantages that may help to reduce slightly faster its huge debt.

The company, which is expected to announce this week that it still lost more than 200 billion yen (1.5 billion euros) in the last financial year having already lost 900 billion yen since 2011, could reduce its capital from 120 billion yen now to 100 million yen (one million euros) or less, which would represent a 99% discount. The transaction was approved by the major banks who lent the group in recent years, hundreds of billions of yen in the company to help finance its restructuring.

Poor expectations

Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ should soon inject another 200 billion yen in company in exchange for yet another weight loss program. Several activities should be abandoned and 5,000 jobs could be eliminated. If investors understand that the group will remain at arm supported by its creditors and manufacturers who hold shares of its capital, they wonder about its ability to survive in the medium term.

After massive bet on the wrong technology in the 2000s, the group hopes it will be worn by Asian orders of LCD screens small and medium size. But several companies in the region are currently engaged in a fierce price war in the market to attract producers of smartphones Korean, Chinese and Taiwanese. One of the most aggressive competitors Sharp is none other than the Japanese Japan Display, born in 2012 under the leadership of the Japanese state, the merging of small business and medium screens from Sony, Hitachi and Toshiba.