Nov 15 (Basis Point) - Hon Hai Precision Industry Co Ltd's
chairman is lining up a T$19 billion ($654 million)
loan for his purchase of a stake in Sharp's
10th-generation liquid crystal display (LCD) plant, said sources
with knowledge of the matter.
Chairman Terry Guo is providing a personal guarantee on the
loan, the sources said, who declined to be identified as they
were not authorised to speak to the media.
A Taiwan investment company owned by Guo will be the
borrower on the financing, which is secured and has a tenor of
less than five years, said one of the sources.
Earlier this year, Guo agreed to pay a total of 66 billion
yen ($817 million) for 1.32 million shares of Sharp Display
Products Corp (SDP), representing 36 percent of SDP, which
controls the world's only 10th-generation LCD plant in Sakai
Apart from Guo's personal investment in SDP, Sharp has also
agreed with Hon Hai to issue new shares to the group through
third-party allotment, according to an announcement by Sharp on
March 27. There have been no announcements on the progress of
the matter, although Taiwan's local media reported the two
parties said they would make a final decision by March 2013.
Reuters reported on Wednesday that US-based Intel Corp
and Qualcomm Inc are in talks to jointly
invest about 30 billion yen in the debt-stricken Japanese
consumer electronics maker. Sharp may reach an agreement as
early as the end of this month with Qualcomm, according to the
Osaka-based Sharp, which has lost three-quarters of its
market value so far in 2012, nearly doubled its forecast
full-year net loss to 450 billion yen earlier this month after
booking a $1.1 billion restructuring charge in July-September.
In September, Sharp received a guarantee for 360 billion yen
in loans from its two main lenders, Bank of Tokyo-Mitsubishi UFJ
and Mizuho Corporate Bank.
The loans are enough to sustain the company through its next
financial year to March 2014, which includes the redemption of
200 billion yen in convertible bonds next September, Sharp's
Chief Financial Officer Tetsuo Onishi said in September.