Sharp may reduce its capital and issue preferred shares as part of a planned restructuring, according to media repoirts, which were not fully disproved by the Japanese company. Facing competition from cheaper Asia rivals in its core liquid crystal panel display business, loss-making Sharp has been working with its main lenders on securing its second major bailout since 2012.

A slashing of its capital would allow Sharp to wipe accumulated losses off its books - a necessary step before the company can resume dividend payments. Bloomberg reported that Sharp was considering cutting its capital from more than 120 billion yen ($1 billion) to just 100 million yen.

Japanese newspaper, Nihon Keizai Shimbun (Nikkei) on May 9, along with others,
reported that the capital reduction was also aimed at easing its tax burden as it would allow Sharp to be classified as a small to medium-sized enterprise for tax purposes.

"We are currently considering various possibilities concerning our capital policy including the issuance of preferred shares and the decrease in capital, but no specific decisions are made at this time," Sharp said, adding that it would announce a new Medium-Term Management plan on May 14.