TOKYO (Reuters) - Sharp Corp (6753.T) said on Friday it was in talks with several companies about its LCD business, as the embattled Japanese firm comes under pressure from its banks to find a partner for the loss-making division.
Despite a $1.7 billion rescue in May, its second major package in three years, persistent losses have meant Sharp is struggling to make the investments it needs to keep its screen business competitive.
Its main lenders want the company to find a buyer for all or part of its ailing LCD business within months, sources familiar with the matter have said.
“I cannot provide any names, but we are currently in negotiations with multiple companies,” Chief Executive Kozo Takahashi told an earnings briefing, adding that he could not say when any deal would be finalised.
Takahashi stressed that a direct investment into Sharp itself was not being discussed.
Taiwan’s Hon Hai Precision Industry Co (2317.TW) has been interested in buying all or part of the LCD unit, while a state-backed fund is also considering a direct investment in Sharp or merging the company’s LCD unit with rival Japan Display Inc 6740.T, sources have said.
Sharp’s July-September operating profit tumbled 86 percent to 3.5 billion yen ($29 million) from a year earlier, dragged down by falling prices of smartphone displays and slow progress in reducing inventory.
The result had been flagged earlier this week.
The LCD division booked an operating loss of 12.7 billion yen in the quarter. It was forecast to post an annual loss of 30 billion yen compared with an initial estimate of a 45 billion yen profit.
($1 = 120.9500 yen)
Reporting by Makiko Yamazaki; Editing by Edwina Gibbs