Hon Hai plans $2b HK listing of unit

Taiwanese firm Hon Hai Precision Industry's listing of Foxconn Interconnect Technology is planned for the second quarter of next year.
Taiwanese firm Hon Hai Precision Industry's listing of Foxconn Interconnect Technology is planned for the second quarter of next year.PHOTO: REUTERS

HONG KONG • Taiwan's Hon Hai Precision Industry plans to spin off a unit in a Hong Kong initial public offering worth at least US$1.5 billion (S$2.1 billion), said the International Financing Review (IFR), citing people close to the deal.

The listing of Foxconn Interconnect Technology (FIT) is planned for the second quarter of next year, with funds from the deal to be used to expand its overseas business and develop new technology, said IFR, a Thomson Reuters publication.

FIT makes electronic connectors and cables. Foxconn Technology Group, whose flagship listed unit is Hon Hai, declined to comment on FIT's listing plan.

Hon Hai also did not immediately comment on the matter.

Bank of America Merrill Lynch, China International Capital Corp and Credit Suisse were tapped to work on the deal, IFR said.

Hon Hai had last week offered to invest in struggling Japanese display maker Sharp, a source with direct knowledge of the matter said on Wednesday.

Sharp is still trying to turn around its business despite a US$1.7 billion rescue in May, its second major bailout in three years.

Sharp and its main lenders are now considering multiple proposals from Hon Hai, including financing for its display operations and an investment in the overall business, the source said.

Hon Hai and Sharp have been weighing a possible tie-up for months, sources familiar with the situation said.

But Japanese state-backed fund Innovation Network Corp of Japan (INCJ) is widely seen as a more likely investor.

INCJ is the biggest shareholder in Sharp's domestic rival Japan Display, and sources have said it has an eye on brokering a merger or partnership between the two firms.

A Hon Hai official was not immediately available for comment, while Sharp said it was in talks with several parties.

"We are at the stage of negotiating with several companies regarding various options of fundamental structural reforms of the LCD panel business. However, nothing is decided at this point of time," a spokesman told Reuters by e-mail.

Tie-up talks between Hon Hai and Sharp fell through in 2012 after the Japanese firm baulked at demands that it said would have given the Taiwanese company too much control.

The two corporations remained in contact and jointly operate a plant in Osaka, western Japan, that makes large LCD panels.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 18, 2015, with the headline 'Hon Hai plans $2b HK listing of unit'. Print Edition | Subscribe