Vedanta's dream will be shattered, Foxconn starts looking for new partner on semiconductor! - Newztezz Online

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Monday, June 26, 2023

Vedanta's dream will be shattered, Foxconn starts looking for new partner on semiconductor!

Vedanta Group, which is the lead partner in Vedanta Foxconn Semiconductors Limited (VFSL), holds 67 per cent stake in the joint venture and the rest with Foxconn.

Vedanta's Anil Agarwal's dream about semiconductor may be shattered. The reason for this is that Foxconn has to start looking for new friends on this front, or rather, to start looking for new partners. According to media reports, Taiwanese contract manufacturing firm Foxconn has started meeting other business houses in the country. So that together with them he can take forward his semiconductor manufacturing project in the country. Sources said Foxconn's joint venture with billionaire Anil Agarwal-led Vedanta Group to set up a semiconductor manufacturing unit in Gujarat's Dholera years ago could turn sour as differences surfaced between the two partners. have come.

In ET's report, a government official told on condition of anonymity that there are differences between the two partners. We are in touch with both, but have suggested Foxconn to look for a different partner. The government official said that the government is concerned about the financial stability of the Vedanta Group.

Raised $ 450 million from these two companies

Vedanta Resources Ltd (VRL), the parent unit of Vedanta Ltd, recently raised $450 million to repay debt by pledging equity from two of its key rivals – Trafigura and Glencore, which analysts said underscores the promoters' dire financial health and their inefficiency. Have done. VRL has raised $200 million from commodity trading company Trafigura Group and $250 million from mining and natural resources company Glencore International AG.

Talks started with other groups of Foxconn

A person with knowledge of the matter said that Foxconn has held informal discussions with two large domestic corporate groups to find a potential partner, but talks are still in the early stages. The government official said with whom they partner, it is "ultimately their (Foxconn) decision" and the government will "evaluate the proposal" and then take a decision. However, Vedanta Group said that its partnership with Foxconn remains intact.

Government approval not yet received

In ET's report, Vedanta said that there has been no change in the status of our joint venture. Vedanta is in a very comfortable position to service its debt. Both had applied to avail the government PLI scheme under the $10 billion Indian Semiconductor Mission in early 2022, however, the government is yet to approve their applications and opened another round earlier this month. Have done. The official said that we have asked them to apply again but it seems that there are some issues between the partners. Vedanta Group, which is the lead partner in Vedanta Foxconn Semiconductors Limited (VFSL), holds 67 per cent stake in the joint venture and the rest with Foxconn.

The two companies disagree

Another source said, apart from concerns over financial obligations, the two JV partners also disagree on the changes to be made in their application to reapply for PLI under the India Semiconductor Mission (ISM). The person further said that for some time there has not been much contact between the two partners. ET had earlier reported that the government had asked Vedanta-Foxconn to rope in a technology partner having license grade semiconductor technology for compliance.

Foxconn should lead the JV

The company had claimed that it has already partnered with some companies and submitted the details to the government without naming the companies. It was also told in the media report that the government had asked Foxconn to lead the joint venture. Earlier this year on May 31, the government re-opened the window for both new and existing applicants to reapply for setting up semiconductor and display fabrication units and avail incentives from the Center under ISM.

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