Japanese government gets in at the Sharp end

sharp2The Japanese government is going to write a $1.7 billion cheque to bail out the troubled electronics maker Sharp.

State-backed fund Innovation Network Corporation of Japan (INCJ) is leading the bailout and the restructuring plan for Japanese electronics firm Sharp is likely to be finalised as early as this week.

The bailout plan will include another $1.3 billion for from the banks. It is telling that you can go billions into debt when you are a company and still get a loan, but if you are debt free you can’t apply for a mortgage.

INCJ has been told to help revive Japan’s once-cutting edge consumer electronics sector and it wants to merge Sharp’s liquid-crystal display business with that of Japan Display. INCJ is the biggest shareholder in Japan Display.

Despite a $1.7 billion rescue in May, Sharp has shown few signs of a turnaround as it and other Japanese consumer electronics makers struggle to compete against the likes of Samsung.

Sharp has also received an investment offer from  Foxconn, although no one knows what is happening with that deal yet.