Sharp to get loan ex­ten­sion, more time for Fox­conn deal

The Pak Banker - - COMPANIES/BOSS -

Sharp Corp.'s banks are ready to push back the dead­line for most of the com­pany's 510 bil­lion ($4.5 bil­lion) in loans and credit lines be­yond March 31, peo­ple with knowl­edge of the mat­ter said, giv­ing the elec­tron­ics maker more time to reach a rene­go­ti­ated deal to be ac­quired by Fox­conn Tech­nol­ogy Group. The ex­ten­sion may be as long as one month, said the peo­ple, who asked not to be iden­ti­fied as the de­ci­sion hasn't been pub­licly an­nounced. Fox­conn Chair­man Terry Gou agreed a month ago to buy Sharp for more than 600 bil­lion yen, but has held off on sign­ing a fi­nal agree­ment while his ad­vis­ers scru­ti­nize the com­pany's fi­nances.

While the wran­gling has raised the risk of the deal fall­ing apart, ex­tra time from Sharp's lenders will re­duce the like­li­hood that Sharp will miss loan pay­ments and face a dire situation, such as liq­ui­da­tion. Fox­conn is seek­ing to cut the amount it will pay for eq­uity in Sharp to about 389 bil­lion yen, one per­son said. Fox­conn will prob­a­bly still pay about 100 bil­lion yen for pre­ferred shares that the banks own, though the pay­ment may be de­layed, the per­son said.

Toy­odo Uemura, a spokesman for Tokyo-based Sharp, de­clined to com­ment. Masako Shiono, a spokes­woman for Mizuho Fi­nan­cial Group, and Taiki Ki­taura, a spokesman for Mit­subishi UFJ Fi­nan­cial Group, de­clined to com­ment. Fox­conn didn't re­spond to an e-mailed re­quest for com­ment.

Fox­conn, which in­cludes Hon Hai Pre­ci­sion In­dus­try Co., and Sharp have said they are work­ing to­ward a fi­nal agree­ment. It has been a month since Sharp's board backed Fox­conn's bailout over a com­pet­ing of­fer from In­no­va­tion Net­work Corp. of Ja­pan. Since then, Gou has put the brakes on the deal while he seeks more clar­ity on Sharp's per­for­mance in the cur­rent quar­ter, peo­ple familiar with the mat- ter have said.

Yomi­uri news­pa­per and Jiji first re­ported that Fox­conn is seek­ing to pay a lower price for eq­uity in Sharp.

A re­duc­tion in the value of Fox­conn's of­fer would put it closer to the bid from INCJ. The Ja­panese gov­ern­ment-backed in­vest­ment fund had of­fered about 300 bil­lion yen for Sharp, all of which would have been put into the com­pany through the pur­chase of ad­di­tional shares. Sharp hasn't gone back to INCJ to seek an­other bid, the peo­ple said.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.