Japan Display to come under Chinese group's control after $2.1 bln bailout (updated)

TPK Holding Co

12/04/2019 10:10

* China-Taiwan group to inject 80 bln yen, gets 49.8 pct
stake
    * Japan Display expects to post 5th straight year of net
losses 

 (Adds details of bailout, background)
    By Makiko Yamazaki
    TOKYO, April 12 (Reuters) - Apple Inc  AAPL.O  supplier
Japan Display  6740.T  said on Friday it has signed a
long-awaited deal under which it will receive a 232 billion yen
($2.1 billion) bailout that will give a Chinese-Taiwanese group
a near-majority stake in the firm.
    The group which includes Taiwanese flat screen maker TPK
Holding  3673.TW  and China asset manager Harvest Group, will
inject up to 80 billion yen by buying shares and bonds. 
    As a result, it will own a 49.8 percent stake and become the
largest shareholder in the company in place of the Japanese
government-backed INCJ fund, effectively ending the government's
efforts to keep the last remaining domestic display maker out of
foreign hands.
    INCJ will also join the bailout by accepting a
debt-to-equity swap totaling 75 billion yen and extending senior
loans worth 77 billion yen. It's stake will fall to 12.7 percent
from 25.3 percent after the deal.
    The rescue funding comes as a late shift to organic
light-emitting diode (OLED) screens and slowing iPhone sales
have threatened Japan Display's survival.  urn:newsml:reuters.com:*:nL3N2191Q5
    Japan Display expects to post its fifth straight year of net
losses in the year ending this month, as disappointing sales of
Apple's iPhone XR, the only model with LCD screens, dashed hopes
for a turnaround.  urn:newsml:reuters.com:*:nL3N2092GB
    The Apple business accounted for more than half of Japan
Display's revenue over the last four years.
    Under the latest deal, Japan Display and the group are
planning to launch an OLED panel plant to produce iPhone
screens, sources with direct knowledge of the matter previously
said.
    Japan Display was formed in 2012 by combining the LCD
businesses of Hitachi Ltd  6501.T , Toshiba Corp  6502.T  and
Sony Corp  6758.T  in a deal brokered by the government.
($1 = 111.9200 yen)

 (Reporting by Makiko Yamazaki and Chris Gallagher; Editing by
Muralikumar Anantharaman)
 ((Makiko.Yamazaki@thomsonreuters.com; 81-3-6441-1039;))