Sharp Corp. is facing an increasing risk of liquidation if a rescue deal with Hon Hai Precision Industry Co. is delayed further, according to a top-rated analyst tracking the electronics maker.

Jefferies Group's Atul Goyal raised his estimated likelihood of Sharp's liquidation to a new threshold of 30 percent to 40 percent from less than 5 percent, citing the potential violation of the company's debt covenants. The Singapore-based analyst, who shares the top spot in Bloomberg's absolute return ranking with two other peers covering Sharp, has a ¥100 price target on the company.

About a month has passed since Sharp's board picked a bailout offer from Hon Hai, better known as Foxconn Technology Group, valued at over ¥600 billion ($5.3 billion) over a competing offer from state-backed Innovation Network Corp. of Japan. Hon Hai Chairman Terry Gou has delayed signing a final agreement as he seeks to reduce the amount the Taiwanese company would pay for control of Sharp. With INCJ out of the picture, the threat of liquidation could force the company and its lenders to accept the new terms, giving Hon Hai access to Sharp's liquid-crystal display technology at a lower price, Goyal said.