Sharp, Foxconn to continue talks as deadline sails by
Can additional investment secured from Foxconn stave off Sharp's demise?
The deadline has passed for Sharp and Foxconn to agree on investment terms, but the companies apparently are still trying to resolve their differences.
A one-year deadline was set to give both companies time to reach an agreement on a potential investment that would save Japan-based Sharp, which is in difficult financial straits. The 12-month time period has come and gone. However, Foxconn and Sharp are still trying to set mutually acceptable terms, according to unnamed sources contacted by Bloomberg.
Although no agreement is expected to come any time soon, reports earlier this month suggested that Foxconn Chairman Terry Gou would still consider investing in the television set maker once Sharp created a new business plan. However, Foxconn -- formally known as Hon Hai -- wanted management control. Disagreements between the two companies have circled around corporate strategy and theof Sharp.
Originally, Foxconn wanted to acquire a 9.9 percent stake in the Japanese firm for 66.9 billion yen ($709 million), but wished to pay less as Sharp's stock prices continued to plummet this year.
Other parties have agreed to invest in Sharp to keep the company alive after the firm said there was "doubt" it would survive this year.
In December, Qualcomm announced a partnership between itself and Sharp in order to create low-power displays using Sharp's IGZO (indium gallium zinc oxide) technology and Qualcomm-subsidiary Pixtronix's MEMS (micro electromechanical systems) displays. Sharp would receive $120 million from the U.S.-based chipmaker as part of the deal, and although the firm missed a production deadline, Sharp will still be granted the full investment amount.
In addition, South Korean smartphone and tablet maker Samsung is investing $111 million for a 3 percent stake in the Japanese firm in order to "build up mutual trust" in the liquid crystal display business as well as keep Sharp afloat.
Sharp posted a net loss of 376 billion yen for the fiscal year that ended in March 2012, and has forecast a 450 billion yen loss for the current fiscal year, which ends March 31.