Sharp Reconstruction Plan Likely To Positively Affect Ratings If Reduced Debt, Investment Funds For Growth Are Included

TOKYO (Standard&Poor's) Feb. 5, 2016--Standard&Poor's Ratings Services today said that a reconstruction plan for Japan-based electronics maker Sharp Corp. (CCC+/Negative/C) is likely to positively affect the company's credit quality if it reduces its debt and provides funds for investment in future growth. On Feb. 4, 2016, Sharp announced it was negotiating a bailout plan, including restructuring of its liquid crystal display (LCD) business, with two candidates, Innovation Network Corp. of Japan and Taiwan's Hon Hai Precision Industry Co. Ltd. (A-/Stable/--), and aimed to enter a final agreement in the next month. Further development in the talks will be a key factor in Standard&Poor's analysis of Sharp's credit quality. Regardless of which entity provides support,

...TOKYO (Standard & Poor's) Feb. 5, 2016--Standard & Poor's Ratings Services today said that a reconstruction plan for Japan-based electronics maker Sharp Corp. (###+/Negative/C) is likely to positively affect the company's credit quality if it reduces its debt and provides funds for investment in future growth. On Feb. 4, 2016, Sharp announced it was negotiating a bailout plan, including restructuring of its liquid crystal display (LCD) business, with two candidates, Innovation Network Corp. of Japan and Taiwan's Hon Hai Precision Industry Co. Ltd. (A-/Stable/--), and aimed to enter a final agreement in the next month. Further development in the talks will be a key factor in Standard & Poor's analysis of Sharp's credit quality. Regardless of which entity provides support, the bailout plan will positively affect Sharp--now suffering from financial distress due to excessive debt and undercapitalization--if it reduces debt and provides funds for investment. However, we believe the company's...

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