Japan Display Inc. said Friday it will sell part of its panel production facilities in Ishikawa Prefecture to Sharp Corp. for $390 million (¥41.6 billion) in a bid to improve its financial health.
The struggling display-maker said in March it had been in talks with Sharp and "a particular customer," apparently Apple Inc., to sell facilities at its plant in Hakusan.
In March, it said it had agreed with the customer, now confirmed as the U.S. technology giant by sources close to the matter, to sell part of its plant facilities for $200 million, and on Friday it said it had agreed to sell additional facilities to Apple for a further $85 million.
Japan Display will use the total of $675 million (¥72 billion) to be received from the two companies to pay back a large portion of its outstanding debts of $702.5 million owed to Apple, which provided most of the plant's construction costs.
The display manufacturer plans to pay back the remaining debt from its other cash reserves, it said.
Sharp CEO and Chairman Tai Jeng-wu said in a statement that the deal, which came as a result of about a year of negotiations, is a "win-win" for both firms.
"I'm confident that it will be a plus for our company's display panel business," he said.
The Hakusan plant had been one of the major producers of liquid crystal display panels for Apple's iPhones since it opened at the end of 2016. But its operations were suspended in July last year after orders from Apple dropped.
Japan Display is expected to move a few dozen people at the factory to different positions.
The ailing panel maker gained shareholder approval on Wednesday for a bailout plan to receive an additional capital injection of up to ¥60.4 billion ($570 million) from Japanese private fund Ichigo Asset Management Ltd.