Business / Corporate

China's Harvest Tech investment fund postpones decision on ¥80 billion package for Japan Display

Kyodo

Japan Display Inc. said Monday that China’s Harvest Tech Investment Management Co. has notified it that the fund will postpone making a final decision until June 27 on whether to offer financial aid to rescue the struggling Apple Inc. supplier.

The move by the fund, part of a consortium that has been considering a capital injection of up to ¥80 billion ($740 million), means Japan Display failed to formally secure the fresh funding ahead of its annual shareholders’ general meeting Tuesday.

Of the consortium’s two other members, Taiwanese panel-maker TPK Holding Co. has dropped out from the bailout plan, Japan Display said in a statement.

The other member, Taiwanese private equity fund CGL group, has not notified Japan Display of any decision yet, the display-maker said.

Japan Display said Friday it expected a final decision from the consortium by that day, after the Chinese-Taiwanese group had twice delayed confirming what was happening.

However, Oasis Management Co. of Hong Kong has stepped forward as a potential new sponsor with Harvest Tech Investment, Japan Display said.

“There is no change in the sum of the bailout scheme of up to ¥80 billion as disclosed in April,” it said.

The Japanese maker also said some domestic and other overseas companies have shown interest in investing, without naming them.

Japan Display said Wednesday it will cut 1,200 jobs, a quarter of its total workforce in Japan, and suspend operations at its plant in Ishikawa Prefecture from July to September as part of restructuring

The display-maker incurred a group net loss for the fifth straight year in fiscal 2018 ended in March at ¥109.43 billion on sales of ¥636.66 billion, down 11.3 percent from a year earlier, hit by falling demand from its main client, Apple.

Japan Display was established in 2012 following the merger of the display operations of Sony Corp., Hitachi Ltd. and Toshiba Corp. with support from state-backed fund INCJ Ltd.

The company also plans to receive additional financial support from INCJ, including cancellation of a debt of ¥45 billion in return for passing on all of its 27.2 percent stake in Joled Inc., an affiliate that makes advanced displays, to the state-backed fund.

Yoshiyuki Tsukizaki, CEO and president of the ailing company, will quit in September to take responsibility for years of sluggish performance by Japan Display. His successor will be Chief Financial Officer Minoru Kikuoka.