Sharp landed a sizable boost when Qualcomm agreed to invest $120 million in the struggling Japanese tech giant last year, but the deal has hit a snag. Sharp says that the second half of the investment will not go through by the end of March as originally planned.
The deal was a major validation for Sharp’s business, which has struggled with a series of financial issues. Qualcomm made the first $60 million payment in December, but an announcement from Sharp explains that the deal will not be completed as originally slated due to conditions:
[Sharp] will not be able to receive the subscription payment on March 29, the expected subscription payment date, due to certain procedures required under the Companies Act since the discussion on the fulfillment of the conditions precedent to the implementation of the Second Third Party Allotment Capital Increase is still being continued.
It isn’t clearly exactly where the issues lie, but Sharp says that it will “continue its discussions with Qualcomm” in a bid to finalize an agreement for the completion of the deal. Qualcomm bought a 2.64 percent stake and agreed to jointly develop IGZO low-power display technology.
Sharp has since struck an agreement with Samsung which will see the Korean electronics maker buy 3 percent of the company for $112 million, but the deal with Qualcomm represented a major breakthrough.
Saddled with debt, Sharp announced plans to cut 11,000 jobs (then a further 5,000) and its credit rating fall to ‘junk’. The company managed to secure $4.6 billion in loans, which helped Qualcomm and then Samsung see enough potential in its business to invest.
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