(Reuters) - Japan's Sharp Corp plans to issue up to 450 million new shares in a public offering as part of a plan to raise $1.7 billion that the company's board will approve this week, two people with knowledge of the discussions said on Tuesday. The cash injection would further stabilize finances at the company, which a year ago averted failure through a bank bailout. Investors in the Osaka-based maker of display panels for Apple Inc's iPhone and iPad worry however, that price-sapping competition from LCD screen makers in China and elsewhere will could still derail Sharp's turnaround. The latest capital raising will include about 150 billion yen ($1.52 billion) through a public share offering and about 20 billion yen from a third-party allotment. The third-party share placement would be made to companies with deep ties to Sharp, including Lixil Group , Makita Corp and Denso Corp , according to the sources, who spoke on condition they were not identified. In addition to using the funds to invest in its business, Sharp faces a shortfall in its corporate pension plan, part of which it may need to cover in the near term. Total unfunded liabilities were 120 billion yen at the end of March, Sharp has said. Sharp officials did not comment on the plan to raise cash. The company will probably report an operating profit of about 30 billion yen for the six month ending September 30, double what it earlier forecast, after a 168 billion yen loss a year earlier, the Nikkei business daily reported, without saying where it obtained the information. Sharp last year posted a 545 billion yen net loss, pushing its capital below 6 percent of equity, far short of the 20 percent ratio widely seen as a financial-stability threshold for manufacturers. ($1 = 98.79 Japanese yen) (Reporting by Nobuhiro Kubo and Reiji Murai; Writing by Kevin Krolicki and Tim Kelly; Editing by Shinichi Saoshiro and Matt Driskill)