Sharp to scale down solar power operations

Sharp Corp. plans to substantially reduce its domestic and overseas solar power operations to help revamp its

business and management, informed sources said.

The company will extensively scale down all solar cell and power generation operations except for cell

production at its plant in Sakai, Osaka Prefecture, and might also sell U.S. subsidiary Recurrent Energy LLC,

which designs and constructs solar energy plants, the sources said Friday.

Sharp's solar power businesses have been performing sluggishly amid an influx of cheap Chinese products.

In a broader rehabilitation plan revealed the same day, the company aims to return to profitability on an

operating balance basis in the second half of the fiscal 2012 and to log a net profit in the next fiscal year.

Sharp will submit the plan to its creditor banks, possibly as early as Monday, to receive additional loans of

some ¥200 billion. Mizuho Corporate Bank and Bank of Tokyo-Mitsubishi UFJ are expected to decide to extend the

loans later this month, according to the sources.

The rehabilitation plan includes cutting about 5,000 jobs and downsizing two domestic plants, as announced in

August, as well as selling liquid crystal display assembly plants in Mexico and China to Sharp's Taiwanese

partner, Hon Hai Precision Industry Co. The struggling company also could start collaborating with U.S. chip

giant Intel Corp. in small and midsize LCD operations.

In March, the company and Hon Hai agreed that the Taiwanese firm would acquire Sharp shares in return for ¥67

billion. However, they have begun to review the deal following a plunge in Sharp's share price.

Sharp now aims to pave the way for a turnaround without Hon Hai's support by pushing forward restructuring

measures and seeking a new partner.

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