Sharp, Foxconn push to close rescue deal after a month of delays

[TOKYO] Sharp Corp and Foxconn Technology Group said they are pushing to close the rescue deal for the Japanese manufacturer that has been held up by disagreement for more than a month.

Hon Hai Precision Industry Co, Foxconn's flagship company, said on Sunday it will hold a board meeting on March 30 as scheduled where it may discuss the Sharp deal depending on the stage of negotiations, according to a statement to the Taiwan stock exchange. Sharp said today it aims to reach the agreement as soon as possible, and will promptly make information public if it reaches a decision requiring disclosure.

Sharp's banks are ready to push back the deadline for most of the company's 510 billion yen (S$6.2 billion) in loans and credit lines beyond March 31, people with knowledge of the matter said earlier. That would give the Japanese maker of Aquos televisions more time to reach a renegotiated deal to be acquired by billionaire Terry Gou's Foxconn.

Sharp, along with the banks, is aiming for its directors to endorse a final proposal by March 31, one person said, although the board could meet for a vote earlier if a deal is presented. At the same time, an extension by the banks would give Sharp more time to negotiate a final agreement in April.

The shares of Sharp rose as much as 7.1 per cent to 135 yen in early trading in Tokyo, their biggest intraday jump since March 7.

Finish Line The extension may be as long as a month, said the people, who asked not to be identified as the decision hasn't been publicly announced. Gou agreed a month ago to buy Sharp for more than 600 billion yen, but has held off on signing a final agreement while his advisers scrutinize the company's finances.

Foxconn is seeking to cut the amount it will pay for equity in Sharp to about 389 billion yen, one person familiar with the matter has said. The Taiwanese company will probably still pay about 100 billion yen for preferred shares that the banks own, though the payment may be delayed, the person said.

BLOOMBERG