Struggling Japanese electronics maker Sharp Corp plans to suspend tie-up negotiations with Taiwan’s Hon Hai Group (鴻海集團) and search for new capital partners, Japanese media reported yesterday.
Cash-strapped Sharp had been trying to seal a capital injection deal with Hon Hai Precision Industrial Co Ltd (鴻海精密), also known as Foxconn, by a March 26 deadline.
However, Sharp said it would be “difficult to conclude the deal by the deadline due to various factors, including different opinions on cooperation in the field of small and mid-sized LCDs,” the Mainichi Shimbun said.
The recent decline in Sharp’s share value was another factor behind the suspension, the daily newspaper added.
It was not known if the suspension was permanent, but Sharp would now shift its focus to other companies, the newspaper said.
Kyodo News added that the two firms would maintain their existing cooperation arrangement at Sharp’s LCD factory in Sakai, western Japan.
Last year, Sharp reached an US$800 million capital injection deal with Hon Hai, which makes Apple Inc gadgets in China, but the deal stalled as Sharp’s share price nosedived.
In December last year, the company said it had struck a separate US$112 million deal with chipmaker Qualcomm Inc that would see the pair develop energy-efficient LCD panels for smartphones using the Japanese firm’s technology.
Like domestic rivals Sony Corp and Panasonic Corp, the maker of Aquos-brand electronics has been hammered by credit rating downgrades and record losses, which saw the century-old firm warn about its own survival last year.
Earlier in the month, Sharp said that it had lost ￥424 billion (US$4.5 billion) over the nine-month period, while keeping its full-year net loss estimate unchanged at ￥450 billion.
Sharp has embarked on a painful restructuring effort that has included thousands of job cuts and wage reductions from the factory floor to the boardroom.
It also said it would put up real estate as collateral for desperately needed bank loans, including its Osaka headquarters, as it pursued tie-ups with domestic and foreign firms.