FILE PHOTO – Japan Display’s new CEO Minoru Kikuoka speaks during an interview with Reuters in Tokyo, Japan October 7, 2019. REUTERS/Kim Kyung-Hoon
TOKYO (Reuters) – Apple Inc will further help out Japan Display Inc by shortening payment periods, a source familiar with the matter said, as the panel supplier seeks to stabilize its finances.
CEO Minoru Kikuoka, who took the helm in September, told reporters on Wednesday that concerns about an immediate cash shortfall had been allayed but did not mention Apple by name.
The support, which also includes agreements from other business partners to ease payment conditions, would improve its short-term financing situation by as much as 40 billion yen ($370 million), he added.
The measures are separate from a deal worth at least 50 billion yen ($470 million) that Japan Display is seeking to clinch this month, having had to scramble after Chinese investment firm Harvest suddenly pulled out of a bailout plan.
Kikuoka said it was possible the revised bailout deal would not be finalised this month, but added the new agreements from clients and other partners were enough to ensure that the company would stay in business.
Japan Display, which depends on Apple for around 60% of its revenue, has lost money for the last five years and its liabilities now exceed its assets.
Of the planned bailout funds worth at least $470 million, Apple intends to invest $200 million, double the amount it originally planned, sources with direct knowledge of the talks have said.
Hong Kong-based Oasis Management is likely to contribute $150-180 million, Japan Display has said.
Japan Display still owes Apple nearly $900 million for the $1.5 billion cost of building a smartphone screen plant four years ago and the U.S. tech giant is also allowing the supplier to slow the pace of those repayments.
Reporting by Makiko Yamazaki; Editing by David Dolan and Edwina Gibbs