Fox­conn de­tails of­fer for trou­bled sharp

The Pak Banker - - COMPANIES/BOSS -

Tai­wan's Fox­conn has de­tailed its of­fer for trou­bled elec­tron­ics maker Sharp Corp, a per­son with di­rect knowl­edge of the talks said, po­ten­tially com­pli­cat­ing a res­cue bid led by a Ja­panese state-backed fund.

In­no­va­tion Net­work Cor­po­ra­tion of Ja­pan (INCJ), still seen as a front run­ner, will go head-to-head with Fox­conn in the bid­ding for Sharp, and its third bailout in un­der four years.

Fox­conn, for­mally known as Hon Hai Pre­ci­sion In­dus­try, had al­ready of­fered over 600 bil­lion yen for Sharp but had stopped short of de­tail­ing a re­struc­tur­ing plan, peo­ple with knowl­edge of the mat­ter had said last week, damp­en­ing en­thu­si­asm for its pro­posal among Sharp ad­vis­ers.

The com­pany has now pro­vided de­tails to Sharp and its lenders, in­clud­ing a prom­ise not to cut jobs, and Fox­conn founder and chair­man Terry Gou has also met govern­ment of­fi­cials on Tues­day to dis­cuss the of­fer, the per­son said, de­clin­ing to be named as the in­for­ma­tion re­mains con­fi­den­tial.

"Hon Hai's of­fer is de­tailed. It's con­sid­er­ably re­al­is­tic and can't be ig­nored," the source said. An­other in­dus­try source fa­mil­iar with the talks said Fox­conn was "very, very in­tent and se­ri­ous" about its of­fer. Sharp de­clined to com­ment. Ex­ec­u­tive at Fox­conn were not im­me­di­ately avail­able to com­ment.

INCJ is will­ing to in­vest around 300 bil­lion yen in the bailout, while banks are ex­pected to of­fer up to 350 bil­lion yen in fi­nanc­ing, in­clud­ing 150 bil­lion yen in a debt-for-equity swap, a source said late last week. Sharp's lenders, how­ever, have been hop­ing a higher of­fer from Fox­conn could prompt INCJ to raise its bid and help the banks re­coup losses.

Sharp's main cred­i­tors are Mit­subishi UFJ Fi­nan­cial Group Inc's core unit Bank of Tokyo-Mit­subishi UFJ, and Mizuho Fi­nan­cial Group Inc's Mizuho Bank.

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