Tokyo: Sharp Corp, the Japanese electronics maker renegotiating a stake sale to Foxconn Technology Group, rose in Tokyo trading after the Mainichi newspaper said it was in talks with Intel Corp for a possible capital tie-up.

The shares jumped as much as 8.4 per cent to 219 yen, the biggest gain since September 4. Japan’s benchmark Nikkei 225 Stock Average climbed 0.3 per cent.

Sharp, Japan’s largest maker of liquid-crystal displays, may agree with Santa Clara, California-based Intel as early as next month to receive at least 30 billion yen (Dh1.4 billion, $383 million) from the world’s largest semiconductor maker, the Mainichi newspaper reported, without citing anyone. The companies may collaborate in the smartphone business, the report said.

“There is no truth to the report,” Heihachiro Ochiai, a Sharp spokesman in Osaka, said by phone today. Chuck Mulloy, a spokesman for Intel, said the company doesn’t comment on speculation or rumours.

Sharp’s September 2013 convertible bonds gained 4.8 per cent to 66 yen per face value of 100 yen, the biggest daily gain since August 17.

“Sharp’s financing issue has been the centre of attention and the report led to an expectation that may improve,” said Hideki Yasuda, an analyst at Ace Securities Co. in Tokyo. “Nevertheless, even if the report is true, the amount reported isn’t enough to solve Sharp’s debt problem. The rally probably won’t last.”

Job Cuts

The maker of Aquos televisions has been renegotiating terms for the proposed stake sale to Taipei-based Foxconn after Osaka- based Sharp widened its full-year loss forecast eightfold in August, triggering a slide in its shares. Foxconn agreed with Sharp in March to invest 67 billion yen for a 9.9 per cent stake in the TV maker at 550 yen a share.

Sharp President Takashi Okuda is cutting 5,000 jobs and has put up properties as collateral to raise funds as the company projects a second consecutive annual loss. The company plans to return to profit next fiscal year with the help of job cuts and cost reductions, Okuda told employees last week.

The company is considering a target of 30 billion yen net income for the year starting April 1, Kyodo News reported, without citing anyone.

Sharp is working on a contingency plan to present to banks as the company faces a deadline for repaying debt, it said September 7. The electronics maker has turned to its lenders for financial support as commercial papers come due and after Standard & Poor’s and Moody’s Investors Service cut its credit ratings to junk.

The company had 706 billion yen of short-term debt maturing within 12 months and 314 billion yen in long-term debts at the end of June, according to its latest quarterly financial statement. Sharp’s cash and near-cash stood at 218 billion yen at the time.