TOKYO: Shares of Sharp surged 15.21 percent on Monday in a rallying Tokyo market as the electronics maker announced steady progress in investment from US firm Qualcomm.
The Osaka-based firm jumped 61 yen to finish at 462 yen, contributing to a 4.94-percent bounce in the benchmark Nikkei 225 index as investors cheered the weakening yen and better-than-expected US jobs data.
Sharp said on Friday after the market closed that the second batch of Qualcomm’s investment in it will be completed on June 24. That will make Qualcomm the third-largest shareholder with 3.53 percent of the stock.
With the financial and business tie-up with Qualcomm, Sharp aims “to ensure improvement in quality that would lead to stable profit base and enhanced corporate value,” the company said.
Analysts have said that boosting ties with Qualcomm, which has strength in central processing units for smartphones, is favorable to Sharp’s corporate performance in the long term.
Sharp in December announced that it had struck a $120-million deal with Qualcomm as it moves to repair its tattered balance sheet, with the agreement calling for joint development of liquid crystal display screens for smartphones.
The US firm has handed over about half of the investment, buying around 30 million new shares at 164 yen, giving it a 2.56-percent stake in Sharp.
The second payment was originally planned for March 29, but was delayed as the two sides discussed details of the pact. The amount of the second payment would be about 5.96 billion yen, Sharp said on Friday.
This would give them around 11.9 million shares at a price of 502 yen each.