TOKYO Feb 22 Sharp Corp is unlikely to
include a capital infusion from Hon Hai Precision Industry Co
Ltd in its turnaround plan as talks between the two
companies have hit a snag, sources familiar with the matter
The Japanese consumer electronics maker and its main lenders
are drawing up a business plan to convince shareholders and
creditors that Sharp can survive its ongoing difficulties with
debt and fierce competition from foreign brands.
The tieup with the Taiwanese company, best known as one of
Apple Inc's manufacturing partners, would have been the
pillar of Sharp's revival efforts. But talks to sell a 9.9
percent stake to Hon Hai have stalled over arguments about
executive control, as the March deadline looms.
"We cannot make a plan based on something that is uncertain.
For us, it's over," said a banking source who declined to be
identified because they were not authorised to discuss the
Without a Hon Hai's capital infusion, the Osaka-based firm
will need to devise other ways to boost its capital. It must
also persuade its creditors to refinance debts. In October, it
won a $4.4 billion bailout from its banks to repay short-term
loans and stave off failure.
In December, chip maker Qualcomm Inc agreed to
invest as much as $120 million in Sharp. As part of that
agreement, Qualcomm said it would work with Sharp to develop
new, power-saving screens based on Sharp's IGZO technology.
Sources said drawing up Sharp's business plan has fallen
behind schedule as the company has yet to come up with
convincing growth stategies, and an announcement is not likely
to come until after its new financial year which starts in
A Sharp spokeswoman declined to comment.
(Reporting by Taiga Uranaka and Reiji Murai; additional
reporting by James Topham; Editing by Daniel Magnowski)