Sharp Corp. President Kozo Takahashi stressed Thursday that the struggling electronics maker will continue negotiations with both Hon Hai Precision Industry Co. and the Innovation Network Corporation of Japan (INCJ) over their bailout plans, but with a focus on Hon Hai.
Takahashi said Sharp is putting more “resources” into talks with the Taiwan tech giant.
“It’s [the talks with] Hon Hai that we are currently putting more resources into,” Takahashi said during a press conference at Sharp’s Tokyo office. He added that the company aims to conclude a final contract on its bailout in about a month.
Sharp is currently undergoing corporate restructuring. It discussed bailout offers presented by the INCJ, a government-sponsored fund based in Tokyo, and Hon Hai during its board meeting earlier on the day.
Hon Hai’s rescue plan includes an about ¥700 billion capital injection to turn Sharp into its subsidiary. The company plans to keep Sharp’s employees and the Sharp brand, and to allow its top management to stay in their current posts.
Through the acquisition, Hon Hai plans to absorb Sharp’s advanced liquid-crystal display technology and strengthen its own LCD business. The LCD market for car devices and other items is expected to grow in the future.
By placing Sharp under its umbrella, Hon Hai aims to expand its business range from its main area of commissioned manufacturing.
The INCJ initially proposed injecting about ¥300 billion of capital into Sharp, but has now raised its total offered assistance to ¥500 billion. The INCJ proposed offering a line of credit of ¥200 billion to be used by Sharp for future capital investment.
The INCJ is also requesting that Sharp’s creditor banks provide financial assistance totaling ¥300 billion through means including de facto debt forgiveness. If the banks agree, Sharp will be able to receive a total of ¥800 billion in financial assistance.
The INCJ plans to turn Sharp into its subsidiary and then spin off Sharp’s LCD unit to integrate it with major LCD maker Japan Display Inc. It is also considering integrating Sharp’s other units with other companies to strengthen its competitiveness.
Some government officials have voiced concern that Sharp’s human resources and technologies may flow out of the country if the company comes under Hon Hai’s umbrella.(The Yomiuri Shimbun)
Link: http://the-japan-news.com/news/article/0002728380
20
