TPK and the Harvest Group not decided yet on JDI's bailout deal

Last month Reuters detailed the upcoming $2.1 bailout deal for Japan Display, led by a group of investors from Taiwan and China, including TPK and the Harvest Group. TPK and the HG are supposed to invest 80 billion Yen, but a new report from Reuters says that the plan is not finalized yet.

In what could just be a negotiating tactic, Reuters reports that the company informed JDI that they have not made a decision yet and are now "re-examining the prospects for Japan Display’s business performance". In any case it seems that JDI's future is not secure yet.

In addition to TPK's and the HG's investment, the Japanese government INCJ fund will provide 77 billion Yen in bonds and will also accept a debt-to-equity swap worth 75 billion. The total deal is worth around $2.1 billion.

In August 2017, Japan Display announced a last-resort strategic focus on OLED displays as the Japanese display maker failed to shift to OLED displays in time. In 2017 JDI announced it is beginning to seek funds for the change in focus, and since then we have heard of several plans in place.

Following the deal, the new buyers from Taiwan and China will hold a 49.8% stake, while INCJ's stake will drop to 12.7% (down from 25.3%). It could be that the new investors seek to increase their stake following the investment.

JDI, meanwhile, is expected to post its 5th straight year of losses - and have seen its market share drop from 400 billion Yen in 2014 (when it went public) to around 67 billion yen today. According to an earlier report from Reuters, JDI will start supplying Apple with OLED displays for its 2019 smartwatch device.

Posted: May 17,2019 by Ron Mertens