Taiwanese manufacturing giant Foxconn is considering a reduced investment into loss-making Japanese firm Sharp by around 100 billion yen ($893 million) from an initial figure of 489 billion yen, according to a report in Reuters.
Foxconn, also know as Hon Hai Precision Industry Co is considering slashing the offer to take account of a deterioration in Sharp’s earnings in the financial year ending March 31st, as well as larger than expected losses in future.
Late last month, Sharp said it would issue $4.4 billion in new shares to give Foxconn a two-thirds stake, but the Taiwanese firm put the takeover on hold at the last minute after the Japanese company revealed undisclosed liabilities.
Sharp, which was one leading in high end displays for smartphones and TVs, has struggled in recent years due to a slow pace of innovation and increased competition from Asian rivals.
Foxconn now aims to pay less for Sharp stock from the planned 118 yen per share, but the Taiwanese firm, which assembles electronics such as the iPhone, continues to push for a two-thirds stake in Sharp.
The two firms are now trying to finalise the deal by the end of March. Foxconn is negotiating with Sharp’s creditors to trim half the preferred shares owned by the banks, worth 200 billion yen, or offer less for the shares.
Banks are also ready to provide financial assistance to Sharp, such as extending the March deadline and lowering the interest rate on billions in loads extended to the Japanese company.
Larry Banks is a keen follower of technology and finance. He has worked for a variety of online publications, writing about a diverse range of topics including mobile networks, patents, and Internet video delivery technologies.