Foxconn's Sharp Acquisition Plans May Be Thwarted Next Week: Report

A Japanese state-backed fund and Sharp's lenders are likely to agree on a new rescue plan worth around JPY 650 billion ($5.5 billion or roughly Rs. 37,219 crores) for the struggling display maker by next weekend, sources familiar with the matter said on Friday.

Innovation Network Corporation of Japan (INCJ) is offering to invest JPY 300 billion ($2.6 billion or roughly Rs. 17,595 crores) in Sharp, while banks were expected to offer up to JPY 350 billion in financing including JPY 150 billion in a debt-to-equity swap, the sources with direct knowledge of the talks told Reuters.

If successful, INCJ would represent the third bailout in as many years for Sharp, known for its liquid crystal display (LCD) technology and super-thin screens.

Taiwan's Hon Hai Precision Industry Co, also known as Foxconn, has offered JPY 600 billion for Sharp but has not yet proposed any detailed restructuring plan for the company, the sources said, requesting anonymity because they were not authorised to talk to the media.

Sharp, once a leader in high-end displays for smartphones and TVs, has struggled with persistent pricing pressure from Asian rivals. It received a second bailout worth $1.7 billion (roughly Rs. 11,396 crores) in May, but has shown few signs of a turnaround.

Previous tie-up talks between Hon Hai and Sharp fell through in 2012 after the Japanese company balked at demands that it said would have given the Taiwanese firm too much control. The two remained in contact and jointly operate a plant in Osaka, western Japan, that makes large LCD panels.

Edited by Gadgets 360 Staff from original story by Reuters