Japan Display to receive $100 million investment from Apple

Smartphone screen maker Japan Display is set to receive $100 million investment from Apple, one of the customers, as part of a bailout deal led by a Chinese investment firm.

Japan Display did not name Apple.

Japan Display is facing a funding crunch due to Apple’s recent shift away from liquid-crystal displays (LCDs) and disappointing sales of the iPhone XR, the only LCD model in Apple’s 2018 line-up.

Apple accounted for 60.6 percent of Japan Display’s revenue in the last financial year ended March. Apple will join a consortium led by China’s Harvest Group in investing up to 80 billion yen or $743 million, Reuters reported.

Japan Display said in a statement Harvest Group had formalized its decision to inject nearly $500 million, including the $100 million investment from the unidentified customer.

The Japanese company in a separate statement on Friday said Hong Kong-based activist investor Oasis Management, another consortium member, has decided to invest $150 million to $180 million. The investment is dependent on conditions including no major cuts in orders from a main customer.

The total investment from Harvest, Apple and Oasis will be still short of Japan Display’s $743 million target. The company said it is in talks with other potential investors to join the deal.

Japan Display had been pursuing a bailout deal with a Chinese-Taiwanese consortium, but the suitors repeatedly delayed making a formal decision in order to reassess the company’s prospects.

Taiwanese screen maker TPK Holding and financial firm CGL Group dropped out of the process earlier this month.

Japan Display owes Apple over $900 million for the $1.5 billion cost of building a smartphone screen plant four years ago.

Apple has agreed to slow the pace of repayment for two years and to consider increasing orders from Japan Display in order to help stabilize Japan Display’s finances.

The U.S. technology company will also procure some organic light-emitting diode (OLED) screens from Japan Display for the Apple Watch later this year.