Business

Sharp's shares fall 11% after Foxconn takeover deal stalls

Sharp unveils the humanoid robot Image copyright Getty Images
Image caption Sharp has been saddled with heavy debts and in 2012 came close to bankruptcy

Shares in electronics giant Sharp lost 11% in Tokyo amid reports that the delay in its takeover by Taiwanese manufacturer Foxconn was due to previously undisclosed losses.

The $4.3bn (£3.08bn) deal was announced by Sharp on Thursday.

But Foxconn later said it would not sign the deal until it clarified "new information" Sharp had provided, without giving any specifics.

Foxconn, also known as Hon Hai, assembles most of the world's iPhones.

Alleged losses

Several unconfirmed reports quoting unnamed sources have emerged saying that the "new information" provided at the last minute had to do with huge losses on Sharp's balance sheet.

Reuters quoted sources as saying the liabilities amounted to "hundreds of billions of yen", while the Nikkei Asian Review put the figure at 350 billion yen ($3.1bn, £2.2bn).

Nikkei said Sharp had on Wednesday morning sent Foxconn documents listing the details of these losses, including severance pay, breach-of-contract penalties, and repayments of government funds.

But Bloomberg reported that the liabilities could also end up being much lower if not all of them are incurred.

Sharp is one of Japan's oldest technology firms, but it has been saddled with heavy debts and has faced two big bailouts in recent years. In 2012 it came close to bankruptcy.

It was founded in 1912 and has pioneered developments in television engineering.

Japanese officials had been reluctant to let the firm be taken over by a foreign firm, particularly because of its breakthroughs in display panel technology.

Related Topics

More on this story