Foxconn, a Taiwanese contract manufacturing company, has been contacting significant Indian corporate organizations in an effort to collaborate with them to further its semiconductor manufacturing goals in the nation, numerous sources informed ET.
The sources stated that there may be problems with the joint venture (JV) that Foxconn and the Vedanta Group, which is run by billionaire Anil Agarwal, formed a year ago to build a semiconductor fabrication facility at Dholera in Gujarat.
“The two partners have different personalities. We’ve spoken to both, but we’ve advised Foxconn to select a different partner”, a senior government official told ET. The individual went on to say that the government is worried about the “financial stability” of the Vedanta Company.
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Recent Move by Vedanta on Paying Debts to tackle Foxconn:
In order to repay debt through the pledge of equity, Vedanta Resources Ltd (VRL), the parent company of Vedanta Limited, recently raised $450 million from two of its main rivals, Trafigura and Glencore. Analysts claim that this raise highlights the promoters’ dire financial situation and their inability to access more conventional sources of funding, such as banks and private credit, among others.
Trafigura Group, a commodities trading firm, has provided $200 million in funding for VRL, while Glencore International AG, a mining and natural resource corporation, has provided $250 million. Another source claimed that in addition to their concerns about their financial commitments, the two JV partners are at odds about the revisions that should be made to their reapplication for incentives under the India Semiconductor Mission (ISM).
The person said, “There hasn’t been much communication between the two partners in a while.” In order to comply, the government requested that Vedanta Foxconn bring on a technological partner with license-grade semiconductor technology, according to an earlier report from ET.
Without naming the firms, the corporation stated that it has previously cooperated with a few others and provided information to the government. Foxconn had been asked by the government to take the initiative in the joint venture. The government reopened the application window on May 31 of this year to allow applicants—both new and old—to reapply for the establishment of semiconductor and display fabrication units and to request incentives from the Centre under the ISM.
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