JM News UK

Japan's Sharp Corp clinched a $1.7 billion bailout deal from its banks in return for a promise to cut 5,000 jobs and split off its ailing smartphone display unit, a person familiar with the deal said on Thursday. As part of its second major bailout in three years, Sharp's lenders, Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ, agreed to inject a combined 200 billion yen ($1.7 billion) in a debt-for-equity swap, the source said, declining to be identified as he was not authorised to speak publicly on the matter. Sharp CEO Kozo Takahashi, in a meeting earlier on Thursday, pledged to scale back its television operations and cut around 5,000 jobs, 10 percent of the workforce, the source said. Haggling over the extent of job cuts and restructuring had held up the talks, with Sharp initially reluctant to split off the LCD division, which accounts for 30 percent of its total sales, company and banking sources have previously said.Analysts have said splitting off the division could pave the way for a deal such as a merger with rival Japan Display Inc -- a possibility which Sharp has denied considering.