TOKYO (Reuters) – Japan Display Inc said on Thursday a Chinese-Taiwanese consortium will formalize its decision to invest in by 14 June, after the client-Apple Inc agreed to wait for money owed and a government-backed fund offered to waive the debt.
FILE PHOTO: Japan Display Inc’s logo is pictured at its headquarters in Tokyo, Japan, August 9, 2016. REUTERS/Kim Kyung-Hoon/File Photo
The deal will open up for a lifeline of up to 80 billion yen ($729 million) for the smartphone display maker, hit by slowing sales of Apple’s iPhones and a late shift to organic light-emitting diode (OLED) screen.
The consortium, which includes Taiwanese flat-screen maker TPK Holding Co Ltd and Chinese firm the Harvest Group, is replaced by the Japanese government-backed fund INCJ and Japan Display ‘ s largest shareholder with a 49.8% of the shares.
INCJ interest will fall to 12.7% 25.3%.
The consortium reached a fundamental agreement on the deal in the middle of April, but delayed the formalization of evaluation of Japan Display’s prospects. The reassessment was prompted by a change in Japan to Monitor the financial situation of a person with direct knowledge of the matter told Reuters at the time.
Soon after the delay, the INCJ has offered to forgive 44.7 billion yen in debt in exchange for Japan Display’s 27.2% stake in OLED-panel-maker JOLED, Japan Display said on Thursday.
Reuters could not reach INCJ for a direct response.
Japan Display also on Thursday, said “the principal”, which is the money owed had agreed to the halving of the pace of repayment for two years.
People with direct knowledge of the matter earlier told Reuters that Apple fronted most of the $ 1.5 billion cost of building of a Japan Display factory four years ago, with the Japanese company agreeing to refund from Apple with a percentage of screen the sales.
A Japan Display executive in April said the company still owes his client the amount of 100 billion yen, without the name of Apple.
Apple has not responded to an emailed request for comment.
Reporting by Makiko Yamazaki; Editing by Christopher Cushing