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Bailout Investment For Japan Display Will Have $100 Million From Apple

Bailout Investment For Japan Display Will Have $100 Million From Apple
Apple would be part of a bailout package of $100 million for the Japanese smartphone screen maker Japan Display Inc according to news reports with information from sources. The bail out deal is being headed by a Chinese investment firm. This development -= minus the participation of Apple, was confirmed by Japan Display on Friday.
Apple had recently announced a shift away from liquid-crystal displays (LCD) which had severely hit Japan Display and resulted in the company facing severe cash and funding crunch. This was further accentuated by disappointing sales of the iPhone XR which was the only model where Apple uses LCD model in the entire range of phones offered by the company for 2018.
In the last financial year, 60.6 per cent of the total revenues of Japan Display was accounted for by orders from Apple. According to reports quoting source information, a consortium led by China’s Harvest Group would be joined by Apple and together they would be investing up to 80 billion yen ($742 million) in the Japanese company.
There have been no comments available on the development from Apple.
The decision by Harvest to put in almost $500 million in investments in Japan Display – which includes the $100 million investment from Apple, has been formalized already, Japan Display said in a statement.
Reports also claimed that a further $150 million is also being planned to be invested in Japan Display by another consortium member - Hong Kong-based activist investor Oasis Management Company Ltd. However, a formal notification from the fund is yet to be received by the Japanese company, Japan Display said.
Talks with other potential investors for making investments in Japan Display are being held by the company.
The news of a possible investment in Japan Display by Apple was first published in the Asahi newspaper early Thursday which had pushed the shares of Japan Display up by as much as 32 per cent.
Earlier, a bailout program was being tried to be negotiated by Japan Display with a Chinese-Taiwanese consortium. However there had been a number of delays made by the suitors about taking a formal decision about the program because it wanted to make further assessment of the prospects of Japan Display. Earlier this month, Taiwanese screen maker TPK Holding Co Ltd and financial firm CGL Group opted out of the program.
More than $900 million is owned to Apple by Japan Display currently. This amount is related to a cost of $1.5 billion incurred by the Japanese firm for the construction of a Japan Display factory almost four years ago.
In order to give some chance to Japan Display to sort out its finances, Apple had earlier decided to make the process of repayment of the amount slower by two years. Apple also considered increasing orders to and purchase from the Japanese firm to further help its finances to stabilize.
An offer of waiver of a 44.7 billion yen in debt has also been made by the Japanese government-backed INCJ fund which is the biggest shareholder of Japan Display.

Christopher J. Mitchell

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