TOKYO - Apple supplier Japan Display Inc said on Thursday it plans to receive up to 90 billion yen ($830 million) in financial support from Ichigo Asset Management, giving effective control to the Japanese asset manager.
Ichigo will join Apple and Taiwanese contract electronics manufacturer Wistron Corp in bailing out the advanced liquid crystal display (LCD) maker.
Apple's commitment to financially support Japan Display has reassured potential investors, two sources with direct knowledge of the talks told Reuters.
"It's a vote of confidence," one of them said on condition of anonymity because of the sensitivity of the matter.
Apple, which sources LCD panels for iPhones from Japan Display, has agreed to shorten payment periods and to put up $200 million. The U.S. tech giant has rarely intervened to help distressed suppliers.
It will soon use organic light-emitting diode (OLED) screens from Japan Display for the Apple Watch, diversifying supplies currently dependent on LG Display. The deal with Ichigo will be finalised in January and completed by March, Japan Display said.
One of the sources said Scott Callon, Ichigo's chief executive officer, would join Japan Display as the company's co-chariman.
"Ichigo has told us that they hope to see us turn around while keeping Japanese technologies with us," Minoru Kikuoka, Japan Display's chief executive, told reporters on Thursday.
The company said the $200 million financial support promised by "a customer", which sources said was Apple, may come in the form of purchasing equipment at a smartphone screen plant.
Japan Display owes Apple more than $800 million for the $1.5 billion cost of building the plant four years ago.
Japan Display has been losing money for the past five years because of its late shift to OLED and a slowing smartphone market. Last month, it reported its 11th consecutive quarterly loss.
Bailout talks have been repeatedly derailed as Chinese investment firm Harvest and several other potential investors pulled out of the plan.
Japan Display was formed in 2012 when the businesses of Hitachi Ltd, Toshiba Corp and Sony Corp merged in a government-brokered deal.
The company came under scrutiny last month after it began a review of past earnings reports following revelations that an executive, who was fired last year, had embezzled about $5 million. ($1 = 108.6400 yen)
(Reporting by Makiko Yamazaki and Chris Gallagher; Editing by Gerry Doyle and Alex Richardson) ((chris.gallagher@thomsonreuters.com; 81-3-4563-2714;))
