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Bloomberg
Japan Display Inc., a struggling Japanese maker of smartphone screens, agreed to a 75 billion yen ($637 million) injection of cash from a government-backed fund.
The supplier to Apple Inc. will issue 45 billion yen of convertible debt to Innovation Network Corp. of Japan, already its largest shareholder, Japan Display said in a statement in Tokyo on Wednesday. Additionally, Japan Display is getting a 30 billion yen subordinated loan from INCJ. Japan Display climbed 2.5 percent to 366 yen at the close in Tokyo before the announcement, after broadcaster NHK reported that it was about to secure the financing.
Japan Display is headed for a third-straight annual loss, as global mobile demand sputters and competitors from Korea and China undercut prices to grab market share.
Japan Display said it will use the capital for the development of organic light-emitting diode displays, which offer more vibrant and energy-efficient screens for mobile devices. Apple, its biggest customer, is considering shifting to next-generation smartphone screens as early as 2017.
“They were running out of cash,†said Amir Anvarzadeh, Singapore-based head of Japanese equity sales at BGC Partners
Inc. “This will be used for a combination of things†including OLED research and development as well as re-starting idled LCD plants, he said. “There’s also a political issue of not letting these companies go bust.â€
Japan Display also announced on Wednesday that it is raising its stake in JOLED Inc., a Japanese OLED-display maker, to 51 percent from 15 percent, through a transfer of shares held by INCJ to Japan Display.
JOLED is working on a new method of manufacturing OLED screens that lack higher resolutions, but are cheaper to make.
Japan Display is seeking to reduce its reliance on mobile devices by shifting toward autos, virtual-reality gadgets, high-end laptops and other areas such as health care and education, the Tokyo-based company said in the statement. “The competitive environment has intensified due to a Korean manufacturer’s active marketing for OLED displays,†Japan Display said.