Japan's Sharp says Qualcomm investment delayed
Monday, 18 March 2013
TOKYO: Cash-strapped Japanese electronics giant Sharp said Monday that a badly needed capital injection from US chipmaker Qualcomm had been delayed as the two sides hammer out details of the pact.
Sharp in December announced it had struck a $120 million deal with Qualcomm as it moves to repair its tattered balance sheet with the agreement calling for joint development of liquid crystal display (LCD) panels for smartphones.
The US firm has paid about half of the investment, giving it a 2.64 percent stake in Sharp, with the second payment which should be around $60 million scheduled for March 29.
"But it has become impossible to get the payment on March 29 ... with negotiations continuing on the terms of the second new share issuance," Sharp said in a statement, without elaborating.
Qualcomm's initial investment saw it buy Sharp shares at 164 yen each, about half of the 308 yen they were trading at in Tokyo Monday after falling 2.22 percent in the morning.
A Sharp spokeswoman said the delay was not related to the share price of Sharp -- which has apparently shelved a bigger capital deal with Taiwan's Hon Hai Precision -- but rather questions over mass production of the energy-efficient displays.
She added that the delay would not impact Sharp's earnings, and said the two sides had earlier agreed the second payment could be delayed by three months.
Earlier this month, the Osaka-based maker of Aquos brand electronics announced a 10.4 billion-yen capital tie-up deal with South Korean rival Samsung, making it Sharp's biggest foreign investor.
Sharp, which expects to close its fiscal year to March with a net loss of 450 billion yen, is undergoing a major restructuring that includes thousands of job cuts and overhauling its business, like rivals Sony and Panasonic.
Japan's electronics giants have suffered myriad problems including a strong yen, weak demand in key export markets, fierce competition especially in their struggling TV divisions and strategic mistakes that ruined their finances. (AFP)