Shares of Sharp Corp. of Japan Drop as Company Considers Capital Reduction
Sharp Corp. of Japan said that the company was considering a considerable amount of capital reduction and preferred share issuance. The news worried the investors and its shares dropped wiping almost one third of its market value at a certain stage on Monday. The electronics company is facing a tough time owing to strong competition in the market and has been facing losses for years.
As the Japanese media sees it, the capital reduction is meant to ease tax burden from the company as the smaller capital will permit Sharp to come under the category of a small to medium size company in the tax slab.
Sharp did not give any intricate detail about its decision and said that it will be taking its final decision by Thursday, a time when the company will announce its revised business plan.
According to sources close to matter, the company is planning to cut down its capital from approximately 120 billion yen or about $1 billion to 100 million yen. This is a part of the radical restructuring plan that Sharp has for its future endeavor.
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