Three banks have agreed to offer Sharp a lifeline out of its financial woes.
Bloomberg reports that Sharp is set to receive $313 million (30 billion yen) in loans from three separate banks this week to help the struggling Japanese display maker get back on its feet. These banks will join a 360 billion yen syndicated loan established by Sharp's main lenders.
According to unnamed sources, Resona Bank Ltd., Mizuho Trust & Banking Co., and Mitsubishi UFJ Trust & Banking Corp. will each lend 10 billion yen. Mizuho Corporate Bank Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd. will supply the syndicated loan, which matures at the end of June.
"It can be interpreted as a sign of a more supportive stance [by lenders]," said Takao Matsuzaka, a Tokyo-based credit analyst at Daiwa Securities Co. "The collaboration on panels between Samsung and Sharp may have enhanced Sharp’s reputation among lenders."
This news arrives after Sharp president Takashi Okuda hinted during a press conference on Thursday that talks of investments from Foxconn are being cancelled. Both sides were expected to come to an agreement by the end of the month.
Sources said that Sharp's decision to halt talks with Foxconn stemmed from possible bank loans as the result of its capital alliances with Qualcomm and Samsung. However, Foxconn still claims that negotiations are ongoing, and that it will continue to negotiate with Sharp to "seek any possible breakthrough."
"We are hoping to get as many financial institutions as possible to join the syndicated lending initiated by our main banks," a rep told Bloomberg.
Samsung and Qualcomm came to Sharp's rescue after the struggling display maker saw its stock plunge for seven straight months, reaching a nasty low of 143 yen in October 2012. Samsung purchased 10.4 billion yen of Sharp stock while Qualcomm is investing up to 9.9 billion yen in a two-step transaction.