Apple supplier Japan Display Inc. has reached a basic agreement for a funding package of 80 billion yen ($736 million) to 90 billion yen to help it sustain a struggling mobile-screen business.
Japan Display is facing financial difficulties as a result of the global slowdown in smartphone sales, especially in China. In addition, the latest smartphonews are using OLEDs instead of LCDs, the main product of JDI.
As a result, JDI has recorded a significant impairment loss for the second quarter of the fiscal year ending March 31, 2020.
The money is coming from Ichigo Asset group and the final amount will be determined in January, the Japanese company said in a statement. An unnamed customer, previously reported to be Apple, will put in $200 million in exchange for owning part of the company’s Hakusan plant in central Japan.
The potential rescuers of JDI had included China’s Huawei Technologies Co. and BOE Technology Group Co. in part because of their interest in JDI’s organic light emitting diode technology, but its Chinese rivals have since succeeded in developing their own variants.
The company announced plans in April to secure 117 billion yen in new funds, but those disintegrated when China’s Harvest Tech Investment Management Co., Cosgrove Global Ltd., Topnotch Corporate Ltd. and Taiwan’s TPK Holding Co. left the rescue plan one after another.
As part of the latest deal, Ichigo will take an equity stake of 40% to 50%, according to unconfirmed reports.