The Japanese LCD TV panel maker, which is weighed down by aggressive competition and sluggish TV demand, is also scrambling for money to refinance billions of dollars of debts maturing in the near term.

Sharp's two main creditors will lend 75 billion yen each, fully backed by property and securities held by Sharp, the paper said.

The company's stock declined the most in almost a month on Friday on uncertainty over a tie-up with Hon Hai Precision Industry Co Ltd after the abrupt departure of the Taiwanese company's chairman from Japan.

Century-old Sharp, which also makes screens for Apple Inc's products, is discussing a partnership with Hon Hai that would give the Taiwanese company a 9.9 percent stake and more muscle to cut costs.

Ratings agency Standard & Poor downgraded Sharp's debt to junk and said it was keeping a watch for possible further downgrade.

Sharp is in a hurry to flesh out new restructuring measures this month to attract more financial assistance from its lenders, life insurers and trust banks, the business daily reported.

($1 = 78.3000 Japanese yen)

(Reporting By Garima Goel in Bangalore; Editing by Maju Samuel)

• A Permanent Economic Emergency