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This article was published on April 15, 2013

    Sharp tipped to offload its 9.2% stake in Pioneer for $65 million to cover debts

    Sharp tipped to offload its 9.2% stake in Pioneer for $65 million to cover debts
    Jon Russell
    Story by

    Jon Russell

    Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on T Jon Russell was Asia Editor for The Next Web from 2011 to 2014. Originally from the UK, he lives in Bangkok, Thailand. You can find him on Twitter, Angel List, LinkedIn.

    Struggling Japanese tech firm Sharp is being tipped to cash in its 9.2 percent share in car and audio electronics specialist Pioneer for an estimated 6.3 billion yen (around $65 million).

    The Japan Times reports that the move is part of its efforts to help cover an upcoming debt payment of 200 billion yen (US$2.14 billion) due in September. Sharp — which is the single largest investor in Pioneer — has reportedly been seeking a buyer for its stake since last year as it continues to implement cost-cutting initiatives.

    The companies have been business partners since 2007 and, in addition to the deal that saw Sharp become a Pioneer shareholder, so Pioneer bought a 0.8 percent share in Sharp. That latter investment is said to be unaffected by Sharp’s keenness to offload its stake which, based on stock prices on Friday, would be worth around 6.3 billion yen.

    Sharp’s efforts to meet the debt payments have reportedly seen the company prepare to raise 100 billion yen via a public stock offering, and work to close around 30 billion yen ($313 million) in loans from three banks.

    Elsewhere, the company has been boosted by investments from fellow tech industry firms, although the sums of money of offer have been considerably lower. Last year, chip maker Qualcomm agreed to invest $120 million in the troubled firm, while Samsung bought a 3.0 percent share of Sharp for $112 million in a deal announced in March.

    There was a slight hitch in March, however, as the second half of Qualcomm’s payment was delayed until the end of June 2013.

    Hat tip to ZDNet, headline image via popculturegeek / Flickr