OSAKA – Sharp Corp. President Takashi Okuda plans to visit Taiwan as early as this week to meet with the chief of Hon Hai Precision Industry Co. to revise the terms of their capital tieup deal, according to company sources.
Though admitting the chances are low, the struggling electronics maker hopes its president will hold talks with Terry Gou, chairman of Hon Hai, also known as Foxconn, by the end of this week, the sources said.
The chief of Sharp’s Taiwanese business partner visited Japan last week but left the country Thursday without meeting Okuda.
The two companies are discussing bridging differences over the amount of reduction in the price Hon Hai will pay for Sharp shares from the earlier agreed ¥550 per share as well as over the scope of their business cooperation.
On Monday, Sharp’s share price plunged ¥12, or 6.1 percent, to ¥186, on the Tokyo Stock Exchange after U.S. credit rating agency Standard & Poor’s on Friday downgraded Sharp’s long-term corporate rating by two notches to a level considered speculative for investment.
Selling also stemmed from concerns that negotiations between the two firms will be prolonged, brokers said.
Hon Hai agreed in March to buy Sharp shares at ¥550 each to acquire a 9.9 percent stake.
Meanwhile, Sharp has offered 30 million shares of its holdings in Pioneer Corp. as collateral to obtain financial support from its main creditor banks Mizuho Corporate Bank and the Bank of Tokyo-Mitsubishi UFJ by the end of August, according to a report that Sharp submitted to the Finance Ministry’s Kinki Finance Bureau.
The 30 million shares account for 9.2 percent of Pioneer’s outstanding shares.
Sharp, battered by harsh competition and the strong yen, is facing the need to improve its financial standing.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.