Apple supplier Japan Display is on the verge of finalizing a $729 million bailout after renegotiating its debts.
Apple has agreed to wait for money owed after it fronted the cost of a new Japan Display plant four years ago. Another client has agreed to halve the “pace of repayment,” according to reports.
Japan Display found itself in trouble after demand for the iPhone slowed and Apple started shifting to OLED displays for its flagship handsets. Its future has looked uncertain for many months.
But a Chinese-Taiwanese consortium will invest up to 80 billion yen ($729 million) in the display-maker by June 14 to become its biggest shareholder.
Japan Display grabs a lifeline
The consortium reached an initial agreement with Japan Display back in April, but it delayed finalizing the investment to reassess the company’s prospects, Reuters reports.
Now that Japan Display has renegotiated its debts and found light at the end of the tunnel, the consortium is happy to proceed.
Apple has reportedly agreed to wait for the $1.5 billion it is owed after it paid for a new Japan Display facility. Another unnamed client has halved Japan Display’s debt payments for two years.
The government-backed INCJ, whose stake in Japan Display will fall from 25.3% to 12.7% following the consortium’s investment, has agreed to forgive the 44.7 billion yen it is owed in exchange for Japan Display’s 27.2% stake in OLED panel maker JOLED.
Falling demand for LCDs to blame
Japan Display has long been a supplier of LCD screens for Apple, but it was slow to shift to OLED panel production. As iPhone sales fell and Apple started using OLED screens in its pricier devices, Japan Display was one of the suppliers that suffered most.
This investment will keep the company afloat for now, and ensure Japan Display can continue to supply Apple for the foreseeable future. It was previously reported that Japan Display has been chosen to supply smaller OLED panels for the upcoming Apple Watch Series 5.
