Sharp absorbs unit to cut costs

Appliance maker Sharp (Phils.) Corp. is absorbing Sharp (Phils.) Services Corp. to cut on costs and streamline operations.

Sharp is the market leader in the Philippines in the washing machine, karaoke and color TV categories of the electronic consumer industry.

In documents filed with the Securities and Exchange Commission (SEC), Sharp said its merger with SPSC will allow the procurement of financing and credit facilities under more favorable terms and ensure a more productive use of the properties of the constituent corporations.

The merger will also result in economies of scale and efficiency of operations.

In 1999, Sharp’s service division was spun off into SPSC to create a more dynamic organizational structure to better serve Sharp customers’ needs.

Sharp is engaged in the manufacture and sale of electric appliances and other electronic equipment, parts and accessories.

SPSC, on the other hand, provides cleaning, repair and maintenance services of any type of home appliances.

Under the articles and plan of merger, all the assets and liabilities of SPSC as of June 30 shall be transferred to Sharp in exchange for shares of stock. Sharp shall issue 16,082 shares with par value of P10 per share to stockholders of SPSC.

As of end-June this year, assets of SPSC amounted to P84.8 million as against liabilities of P84.55 million.

The excess in the net assets of SPSC over the worth of shares to be issued in the amount of P90,219 shall be treated as additional paid-in capital.

Of Sharp’s P1.24 billion authorized capital stock, only P1 billion has been subscribed thereby leaving a balance of P240 million still available for subscription.

The merger was approved recently by the SEC on the condition that Sharp shall disclose for a periof of one year the effect of such merger on the financial condition of the company.

Sharp has the largest company-owned after-sales service network in the Philippines , with a total of 31 company-owned service centers operating nationwide.

SPSC’s promotional activities such as its "house-to-house" campaign, giving free check-ups and cost estimates, giving away a souvenir item after

repair of an out-of-warranty unit, extending the standard three-month warranty to four months and rolling back labor charges "considerably increased the number of households served and made the company closer to its customers."