Apple display supplier Japan Display’s 80 billion yen ($729.3 million) bailout has been put on hold while a Chinese-Taiwanese investment group takes another look at the potential the deal could provide in returns to the funds.
The group is made up of the Chinese investment firm Harvest Group and Taiwanese display firm TPK Holding, among others.
Japan Display has struggled in recent years, in the face of reduced orders from Apple, due to the iPhone maker’s shift in production to OLED displays in the place of LCD panels. Japan Display is looking for an influx of cash, to allow then to change production over to OLED. The company agreed to a $2.1 billion bailout from an investment group back in April.
Reuters reports the group planned to provide the first piece of the investment in the company once it had formalized investment decisions by mid-June, but has apparently changed its mind. But the group has informed the company that they will make such decisions “after re-examining the prospects for Japan Display’s business performance,” adding there was no time frame for the review.
The report’s sources indicate the issue lies with Japan Display’s financial situation, which has changed since the deal was initially reached. No details were provided as to the changes. Some analysts believe the review could be an attempt to pressure Japan Display into providing more in exchange for the investment.
The total rescue package, worth 232 billion yen ($2.1 billion), includes government-backed INCJ funding accepting a debt-to-preferred equity swap worth 75 billion yen, and an extension to senior loans of around 77 billion yen.