Mon, Sep 03, 2012 - Page 13 News List

Sharp Corp suggests it will cut price on stake it agreed to sell to Foxconn

Bloomberg

Sharp Corp, the Japanese television maker that agreed in March to sell a stake to Taiwan-based Foxconn Technology Group (富士康科技集團), offered to sell the holding for less, the Nikkei Shimbun reported.

The shares Foxconn and its Hon Hai Precision Industry Co (鴻海精密) unit had agreed to buy for ¥550 each should instead be sold at the average price for Sharp shares, the report said, without saying where it got the information.

SHARES FALL

Sharp fell 13 percent to ¥198 in Tokyo trading on Friday, as Foxconn founder Terry Gou (郭台銘) did not appear at a scheduled press conference in Sakai, Japan, and left the country without announcing a deal.

Sharp is seeking to raise cash and cut costs as ¥706 billion (US$9 billion) of its bonds, commercial paper and borrowings mature within one year.

The company has said it will cut 5,000 jobs to help reduce fixed costs by ¥100 billion after the Japanese currency rose to a postwar high and slumping global TV demand led to a record loss last year.

A call to the TV and display maker’s Osaka headquarters office today outside business hours was not answered.

Sharp president Takashi Okuda met with other Foxconn executives in Osaka, Japan, on Thursday to discuss alliance terms, said Hiroshi Takenami, a spokesman for the Japanese company.

TALKS

The two companies are still in talks to renegotiate the March investment agreement, Foxconn vice president Tai Jeng-wu (戴正吳) said on Thursday in Sakai, the site of a Sharp factory.

The talks have not reached a final stage, he said.

Sharp expects to complete talks with Hon Hai this month, the Asahi Shimbun reported yesterday in an interview with Okuda.

Hon Hai, maker of Apple Inc’s iPad and iPhone, is Sharp’s largest supplier, according to data compiled by Bloomberg.

Foxconn, through its two Taipei-listed units, Hon Hai and Foxconn Technology Co (鴻準) agreed in March to buy 9.9 percent of Japan’s biggest LCD maker for ¥67 billion in a sale of new shares.

The Japanese TV maker’s shares have plummeted since then to less than half the initially agreed price.

CREDIT RATING

Sharp’s credit rating was cut to speculative grade, or junk, by Standard and Poor’s on Friday as Foxconn said it was still renegotiating the planned investment.

Standard & Poor’s lowered the rating two levels to “BB+,” the highest non-investment grade, saying the Osaka-based electronics maker suffers from weak cash flow and deteriorating market conditions.

Sharp, whose shares had the biggest percentage decline on the MSCI Asia Pacific Index this year, was kept on a negative ratings watch.

This story has been viewed 1600 times.
TOP top