June 11 (Bloomberg) -- Sharp Corp. rose to its highest in a month after saying Foxconn Technology Group, which has agreed to invest in the Japanese television maker, will start buying its panels earlier than it had planned.
The shares rose 8.2 percent to 424 yen, their highest since May 2, as of the close on the Tokyo Stock Exchange. The stock was the second-best performer on Japan’s benchmark Nikkei 225 Stock Average, which added 2 percent today.
Foxconn’s flagship Hon Hai Precision Industry Co. will start buying from Sharp’s TV panel unit next quarter, three months earlier than planned under an agreement in March, Sharp President Takashi Okuda, 58, told reporters June 8. The large LCD-making operation, in which Foxconn Chairman Terry Gou is investing, will be removed from Sharp’s balance sheet next month, said Okuda, who took charge in April.
Japan’s largest maker of liquid-crystal displays turned to Foxconn, a Taiwanese assembler of electronics including Apple Inc.’s iPad, for 133 billion yen ($1.7 billion) in investments after posting a record annual loss in the year ended March 31. Preparations for the investment by the Taipei-based company are in the “final stage” and awaiting regulatory approval, Okuda said last week.
The large LCD unit, based in Sakai near Osaka, where Sharp is based, will boost the utilization rate to 90 percent from the fiscal second quarter to meet orders from Foxconn, Okuda said. Output at the plant had dropped to about 30 percent of capacity during the first quarter as inventories rose.
The two companies will also collaborate on selling smartphones in China and are considering selling the LCD unit to investors in a public offering, he said, without giving a target date.
Foxconn agreed in March to buy a 9.9 percent stake in Sharp through a new share offering scheduled to be completed by March 2013, according to a statement from Sharp at the time. Gou is investing 66 billion yen in Sharp’s biggest LCD plant, a separate transaction.
To contact the reporter on this story: Mariko Yasu in Tokyo at firstname.lastname@example.org.
To contact the editor responsible for this story: Frank Longid at email@example.com