TOKYO, Sept 7: Banks are hammering out a refinancing plan for Sharp Corp without waiting for Hon Hai Precision Industry Co Ltd to agree to buy a stake in its struggling Japanese partner, sources at the lenders said, as talks between the Apple Inc suppliers pause.
Mizuho Financial Group Inc and Mitsubishi UFJ Financial Group Inc are aiming to arrange financing of as much as 300 billion yen ($3.8 billion) for Sharp by as early Sept. 20 in return for cost-cutting pledges and asset sales, two sources told Reuters on condition they were not identified.
The plan, which will not cover a 200 billion-yen convertible bond that matures in September next year, will go ahead with or without Hon Hai’s capital injection, they said.
To recoup loans already made to Sharp, its banks need to continue financing the company in the hope it can stem losses and return to profit.
‘I don’t think we have a deadline,’ a spokesman for Hon Hai said, when asked when the company was aiming to conclude an agreement with Sharp.
DELAYS
Sharp and Hon Hai had been expected to conclude an agreement for the Taiwanese company to buy a 9.9 percent stake in the maker of Aquos TVs at the end of a trip by Hon Hai chairman, Terry Gou, to Japan a week ago.
His abrupt return to Taiwan a day early scuttled that plan, leaving disappointed Sharp executives to seeking to arrange a meeting with Gou in Taipei.
Gou, who already jointly owns a TV display plant in Japan with Sharp, has since said he wants a say in Sharp’s management in return for Hon Hai’s cash.
Sharp’s chief financial officer, Tetsuo Onishi, said last week that his company would prefer to leave discussion on further cooperation in small LCD displays, mobile phones and other areas until later as it scrambles for cash to pay as much as 360 billion yen in short-term commercial paper.
Sharp said yesterday that it had mortgaged nearly all of its domestic offices and factories, including one which makes screens for Apple’s latest iPhone and its share of the TV panel plant in order to quickly secure fresh loans of up to 150 billion yen. ($1 = 78.97 Japanese yen)
(AGENCES)
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