“Banks are hammering out a refinancing plan for embattled Sharp Corp. without waiting for Hon Hai Precision Industry Co Ltd. to lend a helping hand through a stalled equity investment, sources at the lenders said,” Nobuhiro Kubo and Taiga Uranaka report for Reuters. “Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. are aiming to arrange financing of as much as 300 billion yen ($3.8 billion) for Sharp by as early as September 20 in return for cost-cutting pledges and asset sales, two sources told Reuters on condition they were not identified. The plan, which will not cover a 200 billion-yen convertible bond that matures in September next year, will go ahead with or without capital injection from Hon Hai, they said.”

Kubo and Uranaka report, “For Sharp managers, the best agreement with Hon Hai is a ‘partnership with no operations control,’ said Jeff Loff, an analyst at Macquarie Capital Securities in Tokyo. In addition to fixing its loss-making TV unit, Loff said, Sharp will have to raise the profitability of its small LCD panel business, which fabricates displays for smartphones and tablet PCs, including the latest iPhone that Apple is expected to unveil on September 12… Sharp said on Thursday that it had mortgaged nearly all of its domestic offices and factories, including one which makes screens for Apple Inc’s iPhones in order to quickly secure fresh loans of up to 150 billion yen.”

“Sharp and Hon Hai had been expected to conclude an agreement for the Taiwanese company to buy a 9.9 percent stake in the maker of Aquos TVs at the end of a trip by Hon Hai chairman, Terry Gou, to Japan a week ago. His abrupt return to Taiwan a day early scuttled that plan, leaving disappointed Sharp executives trying to arrange a meeting with Gou in Taipei,” Kubo and Uranaka report. “Gou, who already jointly owns a TV display plant in Japan with Sharp, has since said he wants a say in Sharp’s management in return for Hon Hai’s cash… ‘Terry Gou’s strategy is to ally with Japanese companies against Korean ones. It needs Sharp to achieve that goal,’ said Alex Hu, the head of propriety trading of Mega Securities Co Ltd, which owns Hon Hai shares.”

Read more in the full article here.

Related articles:
Hon Hai set to become Apple display supplier Sharp’s biggest shareholder – August 30, 2012
Sharp jumps on rumored reorg plan; Hon Hai said seeking to double planned investment – August 17, 2012
Sharp says in talks with Foxconn over March investment – August 10, 2012
Options narrowing for Japan’s cash-strapped Sharp; may face future as Apple component maker – August 6, 2012
Hon Hai to renegotiate investment in Sharp after losses – August 3, 2012
RUMOR: Apple to launch upgraded 9.7-inch IGZO iPad this summer; displays to shift from Samsung to Sharp – June 29, 2012
Apple supplier Hon Hai in talks to buy more Sharp shares; Terry Gou says Sharp alliance will beat Samsung in HD – June 18, 2012
Sharp to supply technology to Hon Hai’s China plant for Apple iPhone display production – May 24, 2012
Sharp announces production of world’s first IGZO LCD Panels – April 13, 2012
After using Apple’s new iPad with Retina display, old iPad screens become absolutely unacceptable – March 30, 2012
Apple ‘iTV’ beckons as jackpot in Hon Hai’s Sharp gamble – March 28, 2012
Foxconn-Sharp partnership likely targeting Apple orders – March 28, 2012
Taiwan Apple supplier Hon Hai becomes Sharp’s largest shareholder with 10% stake – March 28, 2012
Apple to unveil smaller 7.85-inch iPad this year, says anonymous Samsung official – March 13, 2012
Wow, Sharp sure is ramping up IGZO display production for some reason – March 2, 2012