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Hon Hai, Banks Agree on Sharp Credit Line to Close Deal: Yomiuri

  • 300 billion yen credit line would cover potential liabilities
  • Takeover has stalled since Sharp board accepted it last month

Hon Hai Precision Industry Co. has reached a basic agreement with Sharp Corp.’s banks over a 300 billion yen ($2.7 billion) credit line, according to the Yomiuri newspaper, potentially clearing a hurdle toward a takeover of the Japanese electronics maker.

Under the agreement, Sharp would be able to borrow from its main banks, Mizuho Financial Group Inc. and Mitsubishi UFJ Financial Group Inc., if it suffers losses from potential liabilities or needs new investments, the Yomiuri said, without giving the source of the information. The banks are also considering waiting for about a month on Sharp’s repayment of about 510 billion yen in loans due at the end of March if talks with Hon Hai are prolonged, according to the newspaper.