The news isn’t so good today for struggling Japanese television maker Sharp (News - Alert). The company is warning investors that it might not be able to survive on its own, as it almost doubled its full-year net loss forecast to $5.6 billion – warning of a “seriously negative operating cash flow” -- and said it was considering alliances with other companies.
"This raises serious doubts about (our ability) to continue as a going concern," said the company in a statement. The company noted that it is addressing the problem by cutting pay for some workers, selling off assets and encouraging employees to take “voluntary redundancies,” or early retirements. It’s unlikely to be enough, however.
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Reuters is reporting today that Sharp has been in talks for months with Hon Hai Precision Industry Co Ltd about the Taiwan-based group becoming its biggest shareholder. Sharp said on Thursday it expected an agreement before a March deadline, but added it was considering other alliances as well.
"Perhaps it will not fail within this year, but I don't think Sharp has a viable business in the next 3-5 years," said Tetsuro Ii, CEO of Commons Asset Management in Tokyo. "The company hasn't got much time left and they need to cut off businesses that they can, conserve cash and ... produce something that's really competitive."
"We have lots of great technology and we want to tap that asset to revive and make money, but I can't say we are now a company with that vitality,” said Sharp CEO Takashi Okuda.
Edited by Brooke Neuman