Sharp Holds Back On Printer And Copier Alliance With Samsung

[Anonymous]

Sharp Holds Back On Printer And Copier Alliance With Samsung

When Sharp Corp. locked in an investment from Samsung Electronics Co earlier this year, the financially struggling Japanese company also gained a big client for its liquid-crystal-display panels, turning a rival in the flat-screen TV market into a close partner.

Reuters

Still, despite the alliance, it seems that Sharp is keeping some of its businesses away from Samsung. Kyodo News and other Japanese media reported Thursday that the talks between Sharp and Samsung about a possible joint venture in their office photocopier operations recently ended as they failed to reach an agreement. The reports said Sharp decided not to team up with Samsung in the business because other Japanese copier makers expressed concerns about Samsung gaining access to key technologies for copier production by working with Sharp.

A Sharp spokesman declined to comment on whether the company has been talking to Samsung about a copier joint venture – let alone whether the talks have failed — but said that Sharp has no plans to form any alliance in that business. Sharp had previously said that Samsung once offered to buy its copier business, but the Japanese company declined the offer.

For Sharp, the photocopier business, though much smaller than its display business, is one of few operations that have been consistently profitable in recent years. Over the past few years, Sharp’s mainstay display panel and TV set businesses have posted massive losses, causing the company’s finances to deteriorate.

Sharp has seen some good news lately. It swung to an operating profit in the quarter through June from a loss a year earlier, and its net loss narrowed sharply, thanks in part to stronger sales of display panels.

The company has already secured enough credit lines from banks to cover a Y200 billion convertible-bond redemption next month.

While improving cash flows and support from banks are positive for Sharp, the company still faces challenges ahead.

Next year, Sharp has a Y30 billion straight-bond redemption in March, and Y100 billion straight-bond redemption in September.

In addition, the company needs to shore up its capital base to increase its equity ratio, a measure of financial stability, which recently stood at only 6%. For manufacturers, 20% or more is usually considered healthy.

The Sharp spokesman said the company continues to consider various options to improve its financial condition.

Sharp Holds Back On Printer And Copier Alliance With Samsung

When Sharp Corp. locked in an investment from Samsung Electronics Co earlier this year, the financially struggling Japanese company also gained a big client for its liquid-crystal-display panels, turning a rival in the flat-screen TV market into a close partner.

Reuters

Still, despite the alliance, it seems that Sharp is keeping some of its businesses away from Samsung. Kyodo News and other Japanese media reported Thursday that the talks between Sharp and Samsung about a possible joint venture in their office photocopier operations recently ended as they failed to reach an agreement. The reports said Sharp decided not to team up with Samsung in the business because other Japanese copier makers expressed concerns about Samsung gaining access to key technologies for copier production by working with Sharp.

A Sharp spokesman declined to comment on whether the company has been talking to Samsung about a copier joint venture – let alone whether the talks have failed — but said that Sharp has no plans to form any alliance in that business. Sharp had previously said that Samsung once offered to buy its copier business, but the Japanese company declined the offer.

For Sharp, the photocopier business, though much smaller than its display business, is one of few operations that have been consistently profitable in recent years. Over the past few years, Sharp’s mainstay display panel and TV set businesses have posted massive losses, causing the company’s finances to deteriorate.

Sharp has seen some good news lately. It swung to an operating profit in the quarter through June from a loss a year earlier, and its net loss narrowed sharply, thanks in part to stronger sales of display panels.

The company has already secured enough credit lines from banks to cover a Y200 billion convertible-bond redemption next month.

While improving cash flows and support from banks are positive for Sharp, the company still faces challenges ahead.

Next year, Sharp has a Y30 billion straight-bond redemption in March, and Y100 billion straight-bond redemption in September.

In addition, the company needs to shore up its capital base to increase its equity ratio, a measure of financial stability, which recently stood at only 6%. For manufacturers, 20% or more is usually considered healthy.

The Sharp spokesman said the company continues to consider various options to improve its financial condition.

[Author]

September 3, 2013 at 11:19 AM