It is said that Foxconn will sign for the purchase of Sharp agreement as soon as next week. The amount of capital injection will remain unchanged.
2016-03-04 10:15
Tencent technology news on March 4, according to foreign reports, sources revealed on Friday that Foxconn and sharp will sign the acquisition deal as soon as next week. Although Foxconn will not change its plan to invest 489 billion yen (about $4.3 billion) in Sharp, the terms of the agreement set for Sharp's creditors may be adjusted as negotiations continue. It is reported that Foxconn and Sharp will reach a merger deal of nearly $6 billion as soon as early next week. Sources said that Foxconn and Sharp are currently extremely optimistic that Sharp's recently disclosed 350 billion yen "contingent debt" will not abort the deal. Foxconn and Sharp had previously deployed hundreds of people at all of the latter's plants to investigate Sharp's list of financial risks. The team then held a meeting together to decide whether the new risks disclosed by Sharp were acceptable. A Sharp spokesman said talks with Foxconn were continuing, but declined to say whether the company's board would need to meet again to approve the revised terms of the deal. As of now, Foxconn spokesman did not comment on the report. Under pressure from the continued decline in smartphone display prices, Sharp decided last week to accept an offer from Foxconn. However, at the last moment of the agreement between the two companies, Foxconn suspended the signing of the deal because Foxconn received a list of "contingent debts" of about 350 billion yen submitted by Sharp, saying it needed more time to study the important information disclosed by Sharp. Sources said that the list disclosed by Sharp includes more than 100 "contingent liabilities", including possible taxation by the Japanese government, intellectual property litigation, and possible losses to the company caused by the destruction of Sharp's intellectual property rights. Sharp is under pressure to repay 510 billion yen of debt to bond banks before the March 31 deadline. Sharp's bondholders said that Sharp first needed to reach an acquisition agreement before they could renew their loans to Sharp. According to the deal with Foxconn that Sharp outlined last week, the company will issue 489 billion yen of new shares to Foxconn. Sharp said Foxconn would also spend 100 billion yen to acquire preferred shares in the company held by creditors Mizuho Financial Group and Mitsubishi UFJ Financial Group. Other sources revealed that Foxconn's other payments were about 70 billion yen, bringing the total amount of the company's acquisition of Sharp to 659 billion yen (about $5.8 billion). It is unclear how much Foxconn is willing to pay in exchange for their holdings of Sharp's preferred shares after adjusting the terms of the agreement set for Sharp's creditors. (Mingxuan)
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2016-03-15
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