Japan's Sharp Corp said it had secured a $1.9-billion U.S. bailout, its second major bank-led rescue in three years, after falling deep into the red as its smartphone display business was battered by competition from Asian rivals.
But while new restructuring measures will include 5,000 job cuts or 10% of its global workforce as well as the sale of its headquarters, the steps were seen as not going far enough.
Chief Executive Kozo Takahashi said he was not considering spinning off the company's troubled display business and would continue making TVs in Japan, leaving investors doubting the company's long-term viability.
Under the deal, main lenders Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ will inject a combined 200 billion yen ($1.7 billion U.S.) in a debt-for-equity swap.
Japan Industrial Solutions, a corporate turnaround fund owned by a consortium that includes the two banks, will also provide 25 billion yen in return for preferred shares.
But while its lenders signed off on the bailout, they did not view Sharp's restructuring measures as complete. A senior official at one of Sharp's main banks said the announcement lacked a solid turnaround plan for the display business.
