Struggling electronics firm Sharp has announced that it signed a ¥360bn (£2.9bn, $4.6bn) bailout deal with banks including Mizuho Corporate Bank and The Bank of Tokyo-Mitsubishi.
The Japanese firm said that it had signed a loan deal with the banks for ¥180bn upfront and a loan facility of an equal amount to take care of its immediate working capital issues.
The two banks may ask others to join in the loan deal to spread the risk of keeping Sharp going, a banking source told Reuters. Sharp needs this much money just to survive the next few months, when short term commercial loans of ¥360bn will come due.
But keeping the electronics firm going is the best way for the banks to get their hands on the other ¥300bn in loans they've already given Sharp. In return, Sharp has been implementing a big restructuring programme, including selling off factories to Hon Hai Group, mortgaging its HQ and other offices and letting thousands of employees go.
The firm was also hoping to sell off a stake to Hon Hai, but negotiations stalled after Sharp's share price fell and the Foxconn daddy wanted to change the terms of the deal and get more control in the company. Rumours that others may be interested in that stake, including Intel, have so far proved unfounded.
The additional money from the banks is likely to force Sharp to cede some control to them, so instead of being Hon Hai's bitch, it'll be in thrall to the staider strategies of the money-shufflers. ®