According to people who were familiar with the matter, Sharp Corp. planned to generate up to USD1.7 billion to turn itself around. The Japanese electronic products maker intends to repay debt and increase its finances.

One of the sources told Reuters that the capital injection was badly needed to keep the Japanese company afloat till the business year ending in March. Moreover, the beleaguered company is facing a corporate pension plan shortfall. Its unfunded liabilities at the end of the business year summed up to JPY120 billion or USD1.2 billion.

Sources also told Reuters that Sharp intended to raise the much needed capital through divestment. JPY150 billion would be raised via an initial public offering, while JPY billion would be raised in third-party share allocation. The capital strategies were lifted from Sharp's financial plan that had been shared with its creditors.

Sharp has been facing stiff competition in the LCD panel market from competitors in China and the world. The LCD panel is sharp's core business, and Apple counts Sharp as its smartphone display panel supplier. It has recorded a JPY545 billion net loss last year, of which made its capital decreased to less than 6% of equity. The financial-stability threshold for manufacturers should be at 20% of equity.