Japan Display Inc. shareholders have signed off on a bailout plan involving a capital injection from a private Japanese fund to erase its negative net worth so the company can turn itself around.
Under the bailout plan, which was approved Wednesday at an extraordinary shareholders meeting, the struggling display supplier to Apple Inc. was slated to receive ¥50.4 billion ($453 million) on Thursday from Ichigo Asset Management Ltd.
Also, state-backed turnaround fund INCJ Ltd. is to swap its ¥102 billion in loans to JDI for preferred shares to improve the company's balance sheet.
Later in the year, JDI is expected to receive another capital injection from Ichigo Asset worth as much as ¥60.4 billion, pending approval at its regular shareholders meeting in June.
Ichigo Asset CEO Scott Callon joined JDI's management team as chairman on Thursday after being elected a board member at the shareholders meeting.
In late September, JDI sank into a negative net worth of ¥101.6 billion after posting a net loss for the fifth consecutive year in the business year ended March 2019 partly due to slumping demand for smartphone displays.
Japan Display CEO Minoru Kikuoka said at a news conference Wednesday that talks to sell its Hakusan plant in Ishikawa Prefecture to Sharp Corp. have been delayed, and that it is considering selling part of the facilities there to Apple before finishing the negotiations with Sharp.
The embattled company initially agreed in April last year to secure up to ¥80 billion in financial support from a Chinese-Taiwanese consortium. But the plan collapsed in September when Chinese Harvest Tech Investment Management Co. withdrew from the initial rescue plan, forcing the panel-maker to seek new sponsors.
JDI was established in 2012 by merging the display businesses of Sony Corp., Hitachi Ltd. and Toshiba Corp. with support from INCJ.