Sharp, Hon Hai Precision to agree to stick to existing stake plan: newspaper

PUBLISHED : Monday, 27 August, 2012, 10:03am
UPDATED : Monday, 27 August, 2012, 10:57am

Sharp Corp and Hon Hai Precision Industry will agree this month to stick to a March plan for the Taiwanese company to take a 9.9 per cent stake in the troubled Japanese TV maker, the Yomiuri newspaper reported on Monday, quoting an interview with the Sharp president.

Okuda in an interview with Japan’s biggest daily “did mention that our position of having a 9.9 per cent investment ratio from Hon Hai still exists,” Sharp spokeswoman, Miyuki Nakayama said.

A Hon Hai spokesperson also said the company did not plan to raise its stake in Sharp, the newspaper said.

Hon Hai in March agreed to buy 9.9 per cent, just below a 10 per cent threshold that would give it the right to seek a break up of the company in the courts, for 67 billion yen, or 550 yen a share.

Sharp’s stock has since plummeted on a wider loss forecast, prompting the Taiwanese company to seek a cheaper deal.

Sharp, which is relying on the Hon Hai investment to help it bolster its finances, may instead seek to raise cash from its Taiwanese partner by selling it two TV assembly plants, one in Mexico and one in China, employing around 3,000 people combined.

Sharp confirmed it was in talks to sell the plants to Hon Hai.

Executives from Sharp and Hon Hai will meet in Japan and are likely to agree the deal by the end of the month, the Yomiuri said.

“We don’t know if it will be agreed this month,” Sharp’s Nakayama said.

Hon Hai chairman Terry Gou has already purchased a 47 per cent stake in Sharp’s TV panel plant in Sakai, western Japan, helping the Japanese company lessen its exposure to losses at the facility.

Gou is in Japan this week and will visit the Sakai factory on Thursday, Taiwan’s defacto embassy told Reuters last week.

Shares in Sharp, which have fallen by more than two thirds since January, were up 3.7 per cent in morning trade, compared with a 0.7 per cent climb on Tokyo’s benchmark Nikkei average.