Gou gets loan to pay short-term borrowings: Hon Hai
The China Post news staff
November 22, 2012, 12:40 am TWN
The NT$19 billion syndicate loan that Terry Gou, chairman of Hon Hai Precision, recently borrowed was for the purpose of paying back the short-term loans he got to purchase a stake in Sakai Display Products (SDP), a subsidiary of Sharp, Hon Hai clarified yesterday.
Hon Hai made the statement after reports that Gou applied for a syndicate loan of US$650 million, or about NT$19 billion, through two to three of his own investment companies. The move immediately raised speculation Gou was to use the money to invest in Sharp.
Yesterday, Hon Hai said that Gou applied for the syndicate loan to pay toward the short-term loans of NT$19.6 billion he got earlier this year to purchase a stake in SDP.
"The loans will expire in December," the firm said. "To save the trouble of renewing those loans and to avoid the handling fees in the process, Gou decided to get a long-term syndicate loan of NT$19 billion to pay toward the short-term loans."
Earlier this year, Gou pledged 370,000 units of Hon Hai's stock, or a 27.61-percent stake of the company, to get short-term loans of NT$19.6 billion from three banks, namely Mega, the Taipei branch of Deutsche Bank and the Taipei branch of UBS. Each stock unit is 1,000 shares.
Breaking the figures down, Gou pledged 160,000, 95,000 and 115,000 units of Hon Hai's stock at Mega, Deutsche and UBS, at the end of June, July 2 and July 3, respectively, to get the money.