TOKYO -- Troubled LCD maker Japan Display has been notified that China's Harvest Tech Investment Management will not go forward with a planned 63 billion yen ($585 million) bailout, the company said Thursday, essentially sending its restructuring plan back to square one.
The liquid crystal display maker, known as JDI, said the investment fund had cited an issue relating to corporate governance. Harvest's infusion was supposed to form the bulk of an 80 billion yen rescue package that included a Hong Kong investor.
In a press conference late Thursday, JDI gave assurances that there will be no problem to the cash flow in the short term. "We are on track to raise $430 million from [Hong Kong's Oasis Management], clients and suppliers," said Minoru Kikuoka, the chief financial officer and next in line to be president. "This can be basically secured between October and November."
A client company sent a notice that it is considering an infusion of $200 million, JDI also revealed. That client is believed to be Apple.
JDI announced in August that it had signed a deal with Harvest and Oasis for the 80 billion yen rescue package. Harvest was to contribute 63 billion yen, just over 10 billion of which would have come from Apple.
JDI initially inked a deal with three companies from Taiwan and mainland China, but the two Taiwanese players pulled out in June.
Even so, the display maker is not likely to have any immediate problems. It received a 20 billion yen infusion on Sept. 3 from Innovation Network Corporation of Japan, a public-private partnership and JDI's largest shareholder. JDI has also begun supplying liquid crystal display panels for Apple's iPhone 11 which has helped support its bottom line.
But JDI will be pressed to rethink its restructuring plans with Harvest's withdrawal. It remains to be seen how Oasis will react, and whether or not Apple will still offer the 10 billion yen in aid it was considering.