Japan Display bailout plan gets shareholder approval

Japan Display Inc. on Wednesday received shareholder approval for a bailout plan involving a capital injection from a Japanese private fund to erase its massive negative net worth and turn around its business.

Under the bailout plan approved at an extraordinary shareholders meeting, the struggling display supplier for Apple Inc. will receive ¥50.4 billion ($453 million) on Thursday from Ichigo Asset Management Ltd.

The state-backed fund INCJ Ltd. will also swap its loans to Japan Display, worth ¥102 billion, for preferred shares, to improve the panel-maker’s balance sheet.

Additionally, Japan Display is expected to receive up to ¥60.4 billion from the Japanese private fund pending approval at a regular shareholders meeting slated for June.

Ichigo Asset Management CEO Scott Callon joined the display-maker’s management as chairman on Thursday, after being elected as a board member at the shareholders meeting.

As of late September last year, Japan Display fell into a negative net worth of ¥101.6 billion after posting a net loss for the fifth straight year in the 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 with Sharp Corp. to sell its Hakusan plant in Ishikawa Prefecture have been delayed, and it is considering selling part of its facilities at the plant to Apple before finishing negotiations with Sharp.

The embattled Japan Display initially agreed in April last year to secure the financial support of up to ¥80 billion from a Chinese-Taiwanese consortium.

However, 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.

Japan Display was established in 2012 through the merger of the display units of Sony Corp., Hitachi Ltd. and Toshiba Corp. with support from INCJ.

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