Sharp says it may reduce capital, shares slide nearly a third

Japan's Sharp Corp said it was considering a capital reduction and preferred share issuance, wiping nearly a third off its market value at one stage yesterday as investors reeled from the severity of its distress after years of losses.

A person familiar with the matter said the electronics manufacturer is planning to slash its capital from more than 120 billion yen (€896 million) to just 100 million yen (€747,000) as part of a drastic restructuring plan. Sharp has been hit hard by mounting competition from cheaper Asia rivals in core its core liquid crystal panel display business.The source said the move would precede a preferred share issuance to its main lenders.

Japanese media suggested the capital reduction will allow Sharp to be classified as a small to medium-sized enterprise for tax purposes. – ( Reuters)