China fund to pull out from bailout plan for Japan Display
TOKYO, NNA - Japan Display Inc. said Thursday that China's Harvest Tech Investment Management Co. will withdraw from a framework to rescue the manufacturer, a key Apple Inc. supplier.
Japan Display had agreed to receive a capital injection of up to 80 billion yen ($742 million) from a consortium of Harvest Tech and Hong Kong's Oasis Management Co.
Japan Display said in a statement it may not be able to continue its operation if it fails to secure the initially planned bailout.
The cash-strapped company said it received a letter from Harvest on Thursday that said the Chinese fund would retract its offer to provide about 60 billion yen, citing a difference of opinion between them on corporate governance.
Japan Display declined to provide more details about the reason for Harvest's withdrawal, while noting it is closely communicating with other sponsors.
Minoru Kikuoka, chief financial officer of the display maker, stressed Thursday night, “We've secured enough cash and there will not be any financial problem.”
He told a hastily convened press conference in Tokyo that the company has already borrowed a total of 40 billion yen from the government-backed INCJ Ltd. in August and September, and has agreed to receive another $430 million from other supporters by November, including the increased amount from Apple.
According to Japan Display, Apple will provide $200 million, up from the previously planned amount of $100 million, while a new sponsor, with its name undisclosed, plans to offer $50 million.
Oasis still plans to invest between $150 million and $180 million, the Tokyo-headquartered company said.
The panel maker said it will still continue negotiations with Harvest while seeking new sponsors, aiming to maintain the current framework of a consortium Suwa Investment formed by the Chinese fund and Hong Kong's Oasis.
The Apple supplier is set to hold an extraordinary shareholders' meeting Friday to gain approval for the bailout plan. The company said it will hold the meeting as scheduled.
Japan Display was established in 2012 through the merger of the display operations of Sony Corp., Hitachi Ltd. and Toshiba Corp. with support from INCJ Ltd.