Japan Display Gets $920m Bailout from Ichigo
Ichigo Asset Management will invest in Apple supplier JDI Display after hearing clients express "confidence in its technologies," Ichigo CEO Scott Callon said on Friday.
Japan Display has agreed a deal to receive up to 100.8 billion yen ($918.87 million) from Ichigo Asset Management.
The deal will give the independent Japanese investment manager effective control of the liquid crystal display (LCD) maker, replacing the Japanese government-backed INCJ fund as the top shareholder.
Ichigo will initially inject 50.4 billion yen into Japan Display by purchasing preferred shares upfront by late March, taking a 44.26% stake.
It is offering to buy an additional 50.4 billion yen in preferred shares for a later date, which could boost its stake up to 70.43% when converted into common shares.
Ichigo's Callon would join Japan Display as the company's chairman.
The bailout comes as Apple, which sources LCD panels for iPhones from Japan Display, has shown its commitment to financially support Japan Display. Apple has agreed to shorten payment periods, relax debt repayment terms and put up $200 million. Japan Display generated 61% of its revenue from Apple in the last financial year.
Apple is also said to lead talks on the potential sale of Japan Display's idled smartphone screen factory to Sharp, another iPhone display supplier.
Japan Display owes Apple more than $800 million for the $1.5 billion cost of building the plant four years ago.
The display maker has been losing money for the past five years because of its late shift to organic light-emitting diode (OLED) screens, competition from cut-price Chinese players and slowing growth in smartphone demand.
Japan Display, which has started supplying OLED displays for the Apple Watch, could extend its OLED screen production for smartphones, Japan Display CEO Minoru Kikuoka said.
Japan Display was formed in 2012 when the LCD businesses of Hitachi Ltd, Toshiba Corp and Sony Corp merged in a government-brokered deal.