Taiwan's Hon Hai Precision (IW 1000/25) said Friday it plans to renegotiate the terms of a deal to buy a stake in struggling Japanese electronics giant Sharp (IW 1000/120) in order to get the shares at a lower price.
Hon Hai, parent company of manufacturing giant Foxconn (IW 1000/519) which builds gadgets for Apple, made the comment after shares in Sharp plunged to their lowest level in nearly four decades.
The Taiwanese company also said Sharp had agreed that it will not have to buy the shares according to the terms they agreed earlier.
In March, Hon Hai and its affiliate companies, collectively known as Foxconn, agreed to take a 10% stake in Sharp, which makes display panels and televisions, for 550 yen ($7) per share.
Hon Hai's comments came after Sharp's shares plunged 28% to 192 yen Friday after the Japanese company said that it now expects a net loss of 250 yen billion for this fiscal year, much worse than expected.
"Due to the volatility of Sharp's share price, Sharp has agreed that [Hon Hai and its units] won't have to buy its stake based on the investment agreement signed on March 27, but Sharp still allows [Hon Hai and its units] to take the same percentage stake," Hon Hai said in the statement.
A Hon Hai spokesman said the company does not have a timetable for its talks with Sharp to renegotiate the deal's terms.
Copyright Agence France-Presse, 2012
Dow Jones Newswires contributed to this story