TOKYO -- Troubled panel maker Japan Display said Tuesday that it would raise $200 million by selling off equipment from a plant to a customer that a source says is seen as key client Apple.
Japan Display, also known as JDI, has been in negotiations with Apple and Sharp to sell its Hakusan liquid crystal display plant in central Japan's Ishikawa Prefecture. A portion of the facilities has remained idle since last July on poor sales of iPhone panels.
The sale to both Apple and Sharp was originally supposed to be finalized by the end of March, according to the source. But the coronavirus fallout reportedly delayed discussions with Sharp. JDI decided to sell LCD production equipment to Apple first and real estate to Sharp later.
Hakusan, built with funds borrowed from Apple as an advance payment, began operations in late 2016. But the utilization rate declined as Apple moved to adopt OLED displays. JDI will apply funds from the sale toward repaying some of the outstanding advance payment balance, which came to 87.9 billion yen ($815 million) in late February.
This deal marks another chapter in JDI's tortuous path to redemption. Multiple investors backed out of previous bailout talks. Japan's Ichigo Asset Management stepped up to offer more than 100 billion yen in financial support. Ichigo is believed to have used the rescue package as leverage to ask Apple to support JDI as well.
By offloading Hakusan, JDI would concentrate smartphone LCD panel production at the Mobara plant in Chiba Prefecture and run an organization that matches demand. In 2018, JDI transferred the Ishikawa-based Nomi plant to the state-backed Innovation Network Corp. of Japan.