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Sharp puts up stock as security
Publication Date : 05-09-2012
Sharp Corp. has pledged its entire 30 million share holding in Pioneer Corp. to its main creditors as collateral, according to a report submitted to the Kinki Finance Bureau.
The shares the company pledged to Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ are worth 6.39 billion yen based on Monday's closing price of 213 yen.
The banks previously extended collateral-free loans to Sharp but sought collateral as a condition for additional recent and upcoming loans worth about 230 billion yen offered to the company.
Sharp also pledged to the banks its 36 million share stake in system development firm Neos Corp. The shares are valued at 172.8 million yen based on Monday's closing price.
Sharp forged a capital and business alliance with Pioneer in 2007. Despite Sharp's move to use its shares in Pioneer as collateral, the company emphasized there is no change in the number of shares it holds in Pioneer or its investment ratio. "Our relationship with Pioneer hasn't changed," a Sharp spokesperson said.
Sharp became Pioneer's largest shareholder after taking a 14.28 per cent stake in the company, which struggled with its flat-panel TV business, for 41.5 billion yen through a third-party allocation. Pioneer then boosted its capital through third-party allocations of new shares to Honda Motor Co., Mitsubishi Electric Corp. and Mitsubishi Chemical Corp., lowering Sharp's investment ratio to 9.2 per cent in 2010.