PEKING (dpa-AFX) - Japanese display panel maker Sharp Corp. (SHCAY) is in the final stages of talks with Chinese personal computer maker Lenovo Group Ltd. (LNVGY, LNVGF) to form a partnership in television operations, the Nikkei business daily reported Wednesday.
According to the report, the two companies plan to sign a memorandum of understanding in January itself. Lenovo plans to use the partnership to make a full entry into the television business.
The Nikkei reported that under the proposed partnership, Sharp plans to sell all the shares in a Chinese subsidiary operating an LCD television assembly plant in Nanjing, China, to Lenovo by the end of the year. Sharp also intends to convert the Chinese subsidiaries handling development and sales into 50-50 joint ventures.
The televisions sold in China will reportedly continue to bear the Sharp Aquos brand name. Sharp will supply the LCD panels from its plants in Japan's Mie and Osaka prefectures. Sharp hopes to raise the operating rates of these facilities by boosting television sales through Lenovo's sales network in China.
The Nikkei also reported that Sharp in in talks to sell its TV assembly plant in Malaysia to Taiwanese electronics manufacturer Wistron Corp. The company reportedly plans to raise about 30 billion yen from the sale of the Nanjing and Malaysian plants.
Sharp has been going through a tough period with unimpressive performance, amid a stronger yen and a dip in demand for televisions. In early November, the company said it expects net loss for the year ending March 31, 2013 to be 450 billion yen or 408.97 yen per share, compared to the prior forecast for loss of 250 billion yen or 227.21 yen per share.
Sharp said it late September 2012 that it secured a secured a 360 billion yen syndicated loan from Mizuho Corporate Bank Ltd. and the Bank of Tokyo-Mitsubishi UFJ Ltd to ensure the stability of its working capital.
Lenovo, the world's second-largest PC vendor, recently closed its $147 million acquisition of CCE, a group of three Brazilian consumer electronics makers. Through the deal, Lenovo will acquire Digibras Industria do Brasil S.A., Digiboard Electronica da Amazonia LTDA, and Dual Mix Comerico de Electronicos LTDA.
Lenovo noted that the acquisition will significantly expand its presence in Brazil, with a manufacturing presence and a full range of consumer products across all four screens - PC, tablet, smartphone and television- that define the new 'PC+ era'.
SHCAY closed Wednesday's trading at $3.55, up $0.04 or 1.14 percent on a volume of 78,667 shares, while LNVGY closed trading at $20.17, up $0.47 or 2.40 percent on a volume of 24,024 shares.
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