TOKYO — Taiwan electronics maker Hon Hai Precision Industry Co is asking Sharp Corp to raise Hon Hai's planned stake in the financially strapped Japanese company to about 20 per cent from the originally agreed 9.9 per cent, the Nikkei business daily reported. Sharp has been resisting Hon Hai's attempt because a stake of more than 10 per cent would give the Taiwan company the right to ask a court to dissolve the Japanese company, the Nikkei reported without citing any sources.
Japanese banks, however, are demanding the completion of a capital tie-up with Hon Hai as a condition of their financial assistance, the report said. Sharp is seeking a capital increase of about 50 billion yen ($633 million) and is approaching US investment funds, Toshiba Corp and Kyocera Corp, the Jiji Press agency said. Sharp was also reportedly considering selling off operations in copiers and air conditioners, aiming to focus on mobile phones and liquid crystal displays as part of a restructuring.
Sharp posted a net loss this month of 138.4 billion yen in the April-to-June quarter, nearly three times higher than the same period a year earlier, on slumping TV sales and the yen's strength. The company also widened its net loss forecast for the current fiscal year, which ends March 31, to 250 billion yen from the 30 billion yen it had predicted in May.
Sharp said it would also cut about 5,000 jobs globally, or 9 per cent of its workforce, by the end of March, mainly through early retirements to turn its business around. Shares in Sharp closed up 5.14 per cent yesterday.
