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Sharp may add 3 000 workers to job cuts

Aug 21 2012 09:41 Reuters

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Tokyo - Embattled Japanese TV maker Sharp Corp may cut a further 3 000 jobs on top of the 5 000 already announced by selling two television assembly plants to Taiwanese partner Hon Hai Precision Industry, according to a source familiar with the discussion.

Sharp will sell TV factories in China and Mexico to Hon Hai, the source said, confirming an earlier report in Japan’s Yomiuri newspaper. Each employs 1 500 workers, added the source, who was speaking on the condition he was not identified.

The sale of assembly plants is the latest in a string of additional steps the troubled TV maker is mulling to curb costs and satisfy bankers it needs to stay solvent.

Kyodo News reported over the weekend that Sharp was considering doubling the number of job cuts to 10 000 from the 5 000, or 10% of its workforce, already planned.

“We continue work towards forming the best alliance within our agreement with Hon Hai, but no decision has been made about selling them our factories in Mexico and China,” a Sharp spokesperson said.

The maker of Aquos TVs also operates assembly plants in Malaysia, Poland and Japan.

Sharp, with debt of ¥1.25 trillion, is scrambling for money to refinance as much as ¥360bn of short-term commercial paper and a ¥200bn convertible bonds maturing in September next year.

The company will submit an asset appraisal report to its banks next month that will identify businesses the century-old company has to sell in return for funding, sources at the company’s lenders have told Reuters.

Mizuho Financial Group and Mitsubishi UFJ Financial Group will provide several tens of billions of yen in stop-gap financing until the report, being compiled by two consultants, including PricewaterhouseCoopers, is ready, the sources said on condition they were not identified.

The amount of funding needed will also depend on how much investment Sharp secures from Taiwanese partner Hon Hai.

Sharp's revised restructuring was not likely to be decided until September, bankers involved in the process have said.

Shares in Sharp, which have fallen by a third since the beginning of August, rose 2.9% to ¥179 on Tuesday. Tokyo’s Topix index inched up 0.1%.


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