TOKYO -- Japan Display is on the verge of receiving a total of 110 billion yen ($1 billion) in credit line commitments from its three major lenders, clearing a crucial step in its planned turnaround efforts.
Mizuho Bank and Sumitomo Mitsui Banking Corp. will each extend 42 billion yen of credit. The remaining 26 billion yen credit line will come from Sumitomo Mitsui Trust Bank. The trio will obtain loan guarantees from the Innovation Network Corp. of Japan, the beleaguered liquid crystal display panel maker's top shareholder.
The Mizuho Financial Group unit, the Sumitomo Mitsui Financial Group member and the Sumitomo Mitsui Trust Holdings subsidiary had offered some 60 billion yen in credit lines before but terminated those contracts at the end of June.
Japan Display is to announce next Wednesday a turnaround plan focusing on factory consolidation in Japan and abroad, as well as early retirement programs. The company had requested aid from the lenders to fund these restructuring steps.
Separately, Japan Display may take in 100 billion yen or more in capital from investment funds and nonfinancial companies to fund much-needed investments in organic light-emitting diode panels and other operations aimed at future growth.
Japan Display was created in 2012 through a merger of LCD businesses of Hitachi, Toshiba and Sony. The company sustained net losses for three straight years through fiscal 2016. It operates six factories in Japan and plans to consolidate facilities and update production equipment.