Foxconn requests bank compromises to make Sharp takeover work

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Foxconn factory workers

Chinese manufacturing giant Foxconn is said to be looking for compromises from two of its main lenders before going ahead with the planned takeover of Sharp, said a report on Tuesday.

The company is reported to have asked Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ to provide Sharp with financial assistance should potential liabilities arise, says Japan’s Nikkei. Foxconn is also reported to be proposing that shares in Sharp held by banks be bought at a value less than the original figure of 100 billion yen, $879 million.

The president of Sharp, Kozo Takahashi, apparently met Foxconn chairman Terry Gou on Monday, suggesting that the deal is making progress despite the delays. Nikkei sources are expecting an agreement letter later in the week.

Foxconn was originally thought to be planning completion of the Sharp acquisition in late February, but the deal was postponed after reportedly discovering undisclosed liabilities of around 300 billion yen or $2.7 billion. Those were then suggested as worst case risks rather than firm obligations.

Taking over Sharp might strengthen Foxconn’s relationship with key partners like Apple, allowing it to sell displays and not just the assembly of parts. In Apple’s case it might then accept higher order prices in exchange for extra convenience and the chance to move its display manufacture from main rival Samsung.

SOURCE: Apple Insider.

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