Business / Corporate

Taiwanese fund drops out of bailout consortium for Japan Display

Kyodo

Japan Display Inc. said Tuesday that a Taiwanese private equity fund has dropped out of a bailout consortium, further clouding the outlook for the struggling panel-maker.

The exit by CGL Group follows the departure of Taiwan’s TPK Holding Co. last week from the consortium that was supposed to offer a capital injection of up to ¥80 billion ($748 million) to the Apple Inc. supplier.

China’s Harvest Tech Investment Management Co., the only remaining member of the consortium that agreed on the bailout plan in April, has notified Japan Display that it will finalize a decision on financial aid by Thursday.

Meanwhile, Oasis Management Co. of Hong Kong has stepped forward as a potential new sponsor, telling the Japanese company that it will make a final decision by Thursday as well.

Touch panel-maker TPK left the group citing “changes in circumstances,” but the reason for the withdrawal of CGL Group was not disclosed. The decisions apparently reflect Japan Display’s business performance, which is deteriorating more than expected.

The maker of display panels reiterated there is “no change” to the capital injection amount of up to ¥80 billion. It also said some domestic as well as other overseas companies have shown an interest in investing, without naming them.

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