GUANGZHOU -- Chinese electronic parts maker O-film Tech has acknowledged that it is in the early stages of negotiating an investment in troubled Japan Display, the world's largest supplier of smartphone screens.
Japan Display had approached the fellow Apple supplier on a possible transaction, O-film said in a statement on Tuesday, adding that no progress had been made in the talks.
O-film has said it seeks credit lines totaling 2.85 billion yuan ($413 million) from lenders such as China's Bank of Communications and Tokyo-based Mizuho Bank's Chinese unit.
Chinese media have reported that O-film plans to use this money to buy a 33% stake in Japan Display, which supplies liquid crystal displays for Apple and other smartphones. O-film has said the credit line is meant to support investment and cash flow at subsidiaries.
Nikkei reported last week that Japan Display, reeling after fourth straight years of net losses and needing fresh capital for investments, had talked with potential Chinese investors on a stake sale. The Japanese display panel maker has been hurt by price competition and remains far behind South Korean rival Samsung Electronics in producing next-generation OLED panels.
Japan Display later released a statement saying it was pursuing tie-ups with unspecified parties.
Shenzhen-based O-film produces smartphone parts, including camera modules. Sales climbed 26% last year to about 33.8 billion yuan, driving a 14% gain in net profit to around 800 million yuan.
Earlier this year, O-film agreed to buy a Fujifilm Holdings plant in China that makes lenses for automotive cameras.