NEW YORK -- Weighted down by an expected annual loss estimated at $5.6 billion, embattled Sharp Corp. warned that it may not be able to survive as an independent company.
Sharp is now forecasting a full-year net loss totaling 450 billion yen ($5.6 billion). In August, it had projected a 250 yen billion loss for the year.
After announcing a massive quarterly loss on Thursday (Nov. 1), the company cited "serious negative operating cash flow," underscoring growing concerns about its ability to survive as an independent company.
The latest results underscore the harsh reality faced by the 100-year-old Japanese company left with with few options.
Despite asset sales along with job and pay cuts, Sharp continues to struggle. It secured a 360 billion yen ($4.64 billion) syndicated loan from Japanese banks last month. The loan, scheduled to run until June 30, 2013, provides short-term relief as the company looks for other way to survive.
But time is running short. In August, Standard & Poor's cut Sharp's credit rating to junk status. That followed huge quarterly losses by the former Japanese consumer electronics giant.
"Sharp's liquidity position has weakened, and the company is highly dependent on short-term borrowings in light of weak internal cash flow and a less favorable funding environment," the ratings agency said.
Sharp could swallow its pride and give in to the terms and conditions demanded by Terry Gou, chairman of Hon Hai Precision Industry Co., also known as Foxconn, making the Taiwan-based group Sharp’s biggest shareholder.
It's still on. But Sharp reportedly has had problems in manufacturing its IGZO panels, which led to a substantial delay in delivery. Plesae read the story here:
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