Foxconn’s Worries Over Vedanta’s Financials Said to Be Reason Behind Withdrawal From JV

The Indian government and Foxconn had concerns over the financial situation of Vedanta, which led to the Taiwanese company parting ways with Vedanta on a chipmaking joint venture, sources familiar with the information told Reuters.

Indian conglomerate Vedanta’s London-based parent, Vedanta Resources, has been plagued by a rising debt pile.

In a statement to Reuters, Vedanta said its Indian unit, Vedanta, is in “a comfortable financial position” and there was “no basis” to such speculation.

India’s IT ministry did not respond to requests for comment on Tuesday.

Some rating agencies downgraded Vedanta Resources this year amid concerns about the risks of a debt default.

There have been no defaults on debts from the group, Vedanta Chairman Anil Agarwal has said.

Meanwhile, Foxconn said on Tuesday it plans to apply for incentives that India is offering under its semiconductor manufacturing policy, a day after the company parted ways with Vedanta on a $19.5 billion (roughly Rs. 1,60,600 crore) chipmaking joint venture.

“Foxconn is committed to India and sees the country successfully establishing a robust semiconductor manufacturing ecosystem,” the company said.

“Foxconn is working toward submitting an application.”

On Monday, Foxconn withdrew from its semiconductor JV with Indian metals-to-oil conglomerate Vedanta, in a setback to Prime Minister Narendra Modi’s chipmaking plans for India.

Foxconn said on Tuesday “there was recognition from both sides that the project was not moving fast enough” and there were other “challenging gaps we were not able to smoothly overcome”, without sharing details.

“This is not a negative,” Foxconn said in a statement.

© Thomson Reuters 2023

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