Japanese electronics giant Sharp is considering selling overseas factories to Taiwan’s Hon Hai Precision Industry Co Ltd (鴻海精密) in a bid to turn around its ailing finances, reports said yesterday.
The reports came as Hon Hai pushes to change the terms of its agreement to take a 10-percent stake in the cash-strapped firm, whose shares plunged this month after it announced a huge loss.
The Nikkei business daily said that Sharp was eyeing sales of its liquid crystal display module plants, adding that the firm may also consider sales of domestic plants.
Sharp has LCD module plants in Mexico, Poland, China and Malaysia, the Nikkei said.
The firm is combing through its asset list and is planning to make a decision on the sale by the end of September, Kyodo News said.
Hon Hai, flagship company of manufacturer Foxconn Technology Group (富士康科技集團), which builds gadgets for Apple, already jointly uses Sharp’s plants as production has slowed amid languishing TV sales.
Sharp this month reported that it lost US$1.77 billion in the months from April to June and warned of a bigger full-year shortfall than first expected, prompting its shares to fall below ￥200.
Hon Hai agreed in March to take a 10-percent stake in Sharp for about ￥550 per share but the firms are now renegotiating the investment.
Taiwan’s Investment Commission on Thursday returned Hon Hai’s application to buy the stake in Sharp and asked for more information about the deal, saying it feared the price was too high.
Sharp Corp, Japan’s biggest LCD panel maker, said it’s in talks with Foxconn Technology Group to make its capital and business partnership agreement formed in March “valid.”
Sharp will disclose any decision as soon as it’s reached, the Osaka, Japan-based company said in an e-mailed statement today. Foxconn, maker of Apple Inc iPads, said Aug. 3 it will renegotiate the price of its investment in Sharp after the Japanese TV maker widened its loss forecast eightfold.
Foxconn said in March it agreed to buy 9.9 percent of the Osaka-based company for ￥67 billion (US$854 million).
Foxconn plans to invest in Sharp through its two Taipei listed units, Hon Hai Precision, the world’s largest contract manufacturer of electronics, and Foxconn Technology Co (鴻準), a maker of computer cases.