TOKYO: Apple Inc supplier Japan Display Inc said on Friday it had not received notice from a Chinese-Taiwanese consortium about a potential 80 billion yen (US$740 million) investment, raising the possibility of a critical delay in much-needed cash.
A further delay of a cash injection could raise questions about the survival of the ailing smartphone screen maker, which has been hit by Apple's slowing iPhone sales and a late shift to organic light-emitting diode (OLED) screens.
Japan Display said in a statement it would make an announcement once it had received notice from the consortium, which includes Taiwanese flat screen maker TPK Holding Co Ltd and Chinese investment firm Harvest Group.
The consortium reached a basic agreement on the deal in mid-April but delayed formalising it to reassess Japan Display's prospects.
Soon after that delay, client Apple agreed to wait for money owed and the biggest shareholder, the Japanese government-backed INCJ fund, offered to forgive 44.7 billion yen in debt.
Japan Display is shrinking the smartphone display business to stop cash outflows and seeking to cut 1,200 jobs. It is also temporarily suspending a main display panel plant funded by Apple and closing one of the lines at another main panel plant.
Those restructuring measures could result in a loss of as much as 79 billion yen for this financial year ending in March, the company said this week.
The bailout deal would allow the buyers to become Japan Display's biggest shareholders with a 49.8 percent stake, replacing the Japanese government-backed INCJ fund.
Japan Display was formed in 2012 by combining the LCD businesses of Hitachi Ltd, Toshiba Corp and Sony Corp in a deal brokered by the government.
It went public in March 2014 and was worth more than 400 billion yen then. It is now worth 67 billion yen.
(US$1 = 108.1700 yen)
(Reporting by Makiko Yamazaki; Editing by David Dolan and Muralikumar Anantharaman)