Apple supplier Japan Display to receive $830m from asset manager Ichigo

A signboard of Japan Display Inc is seen at its factory in Mobara, Chiba prefecture, June 3, 2013. REUTERS/Toru Hanai

Apple supplier Japan Display Inc said on Thursday it plans to receive up to 90 billion yen ($830 million) in financial support from Ichigo Asset Management, giving effective control to the Japanese asset manager.

Ichigo will join Apple and Taiwanese contract electronics manufacturer Wistron Corp in bailing out the advanced liquid crystal display (LCD) maker.

Apple’s commitment to financially support Japan Display has reassured potential investors, sources familiar with the deal said.

“It’s a vote of confidence,” one of them said on condition of anonymity because of the sensitivity of the matter.

Apple, which sources LCD panels for iPhones from Japan Display, has agreed to shorten payment periods and to put up $200 million. The U.S. tech giant has rarely intervened to help distressed suppliers.

It will soon use organic light-emitting diode (OLED) screens from Japan Display for the Apple Watch, diversifying supplies currently dependent on LG Display.

Ichigo is offering to inject 40 billion yen to 45 billion into Japan Display by purchasing common shares upfront at 50 yen per share, two people with knowledge of the discussions said.

If Japan Display chooses to receive the maximum stake, Ichigo’s ownership would exceed 50%, both sources said, but one said the fund and the company were in talks focussing on a ratio slightly under half.

The deal with Ichigo will be finalised in January and completed by March, Japan Display said.

One of the sources said Scott Callon, Ichigo’s chief executive officer, would join Japan Display as the company’s co-chariman.

“Ichigo has told us that they hope to see us turn around while keeping Japanese technologies with us,” Minoru Kikuoka, Japan Display‘s chief executive, told reporters on Thursday.

The company said the $200 million financial support promised by “a customer”, which sources said was Apple, may come in the form of purchasing equipment at a smartphone screen plant.

Japan Display owes Apple more than $800 million for the $1.5 billion cost of building the plant four years ago.

Japan Display has been losing money for the past five years because of its late shift to OLED and a slowing smartphone market.

Bailout talks have been repeatedly derailed as Chinese investment firm Harvest and several other potential investors pulled out of the plan.

Japan Display was formed in 2012 when the LCD businesses of Hitachi Ltd , Toshiba Corp and Sony Corp merged in a government-brokered deal.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.