Sharp Corp. shares climbed in Tokyo after the sale of a stake to Foxconn Technology Group, also known as Hon Hai Precision Industry Co., was completed, ending a four-month wait for the cash-strapped maker of flat panel televisions.
The shares jumped 10 percent to ¥117 in Tokyo on Monday, after rising 31.5 percent over the past two days for their biggest two-day gain ever.
The Osaka-based firm also received a ¥300 billion commitment line from its lenders.
Sharp agreed to a rescue from Foxconn, choosing the Taiwanese firm over a rival bid from the state-backed Innovation Network Corp. of Japan in a takeover battle that spanned four years. President Kozo Takahashi stepped down, to be replaced by Foxconn’s Tai Jeng Wu. Sharp’s liabilities no longer exceed assets after the ¥289 billion infusion, it said.
“With the risk of insolvency removed, the shares have a strong upward momentum,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “How far they climb will depend on how Foxconn will choose to restructure Sharp. It’s not enough to optimize and cut costs, there needs to be a credible strategy for future growth.”
While Foxconn and Sharp agreed to the deal in April, it was not until last week that antitrust authorities in China cleared the acquisition.
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