Japan Display getting $729M bailout after Apple agrees to restructure debt payments

LCD supplier Japan Display has now renegotiated its debts, reportedly including with Apple, and says that the $729 million bailout will be formalized next month.

The iPhone screen maker Japan Display Inc says that a proposed $729 million bailout is to proceed and that the Chinese-Taiwanese consortium will formalize their investment by June 14. It follows renegotiations over Japan Display's debts with Reuters reporting that Apple has agreed to wait for payments it is owed.

Japan Display has not named Apple but did say that "a client" to whom it owned money has now agreed to halve the pace of repayment for two years. In the report on Thursday morning, Reuters suggested that the restructure was by Apple, given that Apple provided at most of the $1.5 billion cost of building a Japan Display plant in 2015. A Japan Display official said in April that the company still owed this unnamed client around $900 million.

At the time, the Japanese firm agreed to repay Apple through a percentage of screen sales. The company's overall financial problems have been exacerbated by this decision to build a plant to make LCD panels. With a decline in LCD use following both a drop in phone demand and a move to OLED displays instead, the plant has reportedly been running at only half its capacity.

Members of the consortium including Taiwanese flat-screen maker TPK Holding Co, had agreed to invest in Japan Display in April but the formal decision was delayed while the company's finances were reexamined.

Previously, the largest shareholder in the iPhone screen company was the Japanese government-backed INCJ fund. The fund offered to forgive 44.7 billion yen (approximately $408 million) in debt shortly after the bailout request, in exchange for Japan Display's 27.2% stake in OLED panel maker JOLED.

9 Comments

lkrupp 10521 comments · 19 Years

About 5 years ago

Apple has a reputation of pounding really hard on suppliers to get the lowest price on components. So Apple loans Japan Display money yet keeps pounding on them to keep prices down? And Japan display needs a bailout because it’s having trouble making a profit? Duh.

AppleExposed 1805 comments · 6 Years

lkrupp said:

Apple has a reputation of pounding really hard on suppliers to get the lowest price on components. So Apple loans Japan Display money yet keeps pounding on them to keep prices down? And Japan display needs a bailout because it’s having trouble making a profit? Duh.

Japan respects Apple, I would help them if I were Apple.

Heck, I'd give them more money and get away from Scamscum.

1STnTENDERBITS 460 comments · 8 Years

lkrupp said:

Apple has a reputation of pounding really hard on suppliers to get the lowest price on components. So Apple loans Japan Display money yet keeps pounding on them to keep prices down? And Japan display needs a bailout because it’s having trouble making a profit? Duh.

There has to be something we're not privy to regarding Japan Display. The only reason this company is still running is multiple bailout loans. It's pretty obvious they can't pay back the loans, yet companies, investment funds, and gov't keep giving them money. I think you're right in that they're never going to make a profit because they owe too much. Japan Display is that recent college grad who took out multiple loans to get through school. Graduates with massive debt, but has to take a job that can't even begin to put a dent in that debt load. So to get by, he takes out more loans... increasing the debt load.

Outside looking in, keeping JD afloat doesn't make good business sense imo. There has to be more to it.

tmay 6455 comments · 11 Years

1STnTENDERBITS said:

lkrupp said:

Apple has a reputation of pounding really hard on suppliers to get the lowest price on components. So Apple loans Japan Display money yet keeps pounding on them to keep prices down? And Japan display needs a bailout because it’s having trouble making a profit? Duh.

There has to be something we're not privy to regarding Japan Display. The only reason this company is still running is multiple bailout loans. It's pretty obvious they can't pay back the loans, yet companies, investment funds, and gov't keep giving them money. I think you're right in that they're never going to make a profit because they owe too much. Japan Display is that recent college grad who took out multiple loans to get through school. Graduates with massive debt, but has to take a job that can't even begin to put a dent in that debt load. So to get by, he takes out more loans... increasing the debt load.

Outside looking in, keeping JD afloat doesn't make good business sense imo. There has to be more to it.

I just read the other day that AT&T is sitting onsite $200B in debt. I'm guessing that creating the AT&T empire the second time was a heck of a lot harder than the first. It's also the case that, with few exceptions for streaming (see Disney), content creation can be derive very little net gain over and above adding / retaining subscribers. Netflix will spend $15B on content this year, and still doesn't have much in the way of positive cash flow. Apple has "dipped" its toe in the water to the tune of better than $1B, but is essentially shoring up its ecosystem.