Arab Today, arab today sharp no investment deal with taiwan\s hon hai
Last Updated : GMT 21:25:08
Arab Today, arab today
Arab Today, arab today

Sharp: No investment deal with Taiwan\'s Hon Hai

Arab Today, arab today

Arab Today, arab today Sharp: No investment deal with Taiwan\'s Hon Hai

Taipei - AFP

The deadline for a crucial capital injection in Sharp from Taiwan's Hon Hai Precision lapsed Tuesday without any deal, with the struggling Japanese electronics giant citing regulatory hurdles. Last year, Sharp announced an investment agreement then valued at about $800 million with Hon Hai, which makes Apple gadgets in China, but the deal stalled as the Japanese firm's share price nosedived. Months of speculation over the fate of the pact followed as cash-strapped Sharp sought out other investors, including US-based chipmaker Qualcomm and South Korean rival Samsung. On Tuesday the deadline for a deal passed, with Sharp saying that the pact faltered because it could not win approval from "relevant authorities". The firm, which is struggling to repair a tattered balance sheet, added that it was "examining the possibility of other ways of funding due to the unfulfillment of this payment". Japan's leading Nikkei economic daily reported that the two sides, which have a pre-existing business relationship, would continue talks but it was unclear if they planned to resurrect a capital investment deal. Hon Hai officials in Taipei were not immediately available for comment. Taiwanese regulators last year returned Hon Hai's application to buy the stake in Sharp and asked for more information about the deal, saying they feared the sale price was too high. Sharp was to sell 121 million new shares worth 66.9 billion yen ($710 million at current exchange rates) to Hon Hai, which would also take half of the Japanese firm's 93.0 percent interest in a huge liquid crystal display plant in western Japan. Sharp shares, which closed 1.69 percent lower at 290 yen on Tuesday, were trading above 500  yen apiece when the deal was announced in March last year. Better known as Foxconn, Hon Hai is the world's largest maker of computer components and produces goods for tech giants including Apple, Sony and Nokia. It employs around one million workers in China, about half of them based in the southern Chinese industrial hub Shenzhen. Sharp, like domestic rivals Sony and Panasonic, has been hammered by credit rating downgrades and record losses, which saw the century-old firm warn about its own survival last year. The maker of Aquos-brand electronics has embarked on a painful restructuring including thousands of job cuts and slashed wages from the factory floor to the boardroom. It also said it would put up real estate as collateral for desperately needed bank loans,  including its Osaka headquarters. It expects to lose about 450 billion yen in the current fiscal year through March. Earlier this month, Sharp said rival Samsung would buy 10.4 billion yen of new shares, or a three-percent stake in the Japanese firm, making the smartphone and tablet maker its biggest foreign shareholder. In December, Sharp said it had reached a 9.9 billion yen capital injection deal with Qualcomm. Japan's battered electronics sector has suffered from a number of problems including a high yen, slowing demand in key export markets, fierce overseas competition and strategic mistakes that left its finances in ruins.

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