Sharp's banks set to offer additional aid as part of Foxconn deal: source

Wed Mar 9, 2016 3:21am EST
 
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By Taro Fuse and Makiko Yamazaki

TOKYO (Reuters) - Sharp Corp's (6753.T: Quote) two main banks are set to lower interest rates on billions of dollars in loans and offer other financial support as part of a planned takeover by Taiwan's Foxconn, a source with direct knowledge of the plan said.

The move is partly a response to a last-minute hitch to the signing of the deal over potential liabilities at the ailing Japanese display maker, although some of the discussions have been going on for a while, the source said.

The deal, which has been estimated to be worth $5.8 billion and will mark the largest acquisition of Japanese tech firm by a foreign company, is now likely to be announced next week, he said.

The core banking units of Mitsubishi UFJ Financial Group Inc (8306.T: Quote) and Mizuho Financial Group Inc 8411.T have extended the vast majority of Sharp's 510 billion yen ($4.5 billion) in syndicated loans which are due at the end of the month.

They also plan to extend the deadline and are considering an additional commitment line, the source said.

Sharp has a total 700 billion yen in interest-bearing debt.

The sources declined to be identified because the plan has not been officially announced. Representatives for Mitsubishi UFJ and Mizuho declined to comment.

Sharp and Foxconn also declined to comment.   Continued...

 
The logo of  Foxconn, the trading name of Hon Hai Precision Industry, is seen on top of the company's headquarters in Tucheng, New Taipei city, December 24, 2013. REUTERS/Pichi Chuang