Cash-strapped Japan Display Inc reported a tenth consecutive quarterly loss and a negative net worth, increasing the urgency for the firm to close a proposed bailout with a Chinese group.
The liquid crystal display (LCD) maker for smartphones, which gets more than half of its revenue from Apple, posted a net loss of 83.27 billion yen ($786.53 million) in the April-June quarter, far wider than the 1.77 billion loss a year earlier.
The ballooning loss, including a 51.4 billion yen writedown on an LCD plant, made its net worth negative, with liabilities exceeding assets. Two consecutive years of negative net worth would mean the company would be delisted, according to rules of the Tokyo Stock Exchange.
Japan Display is tapping a consortium led by Chinese investment firm Harvest Group for an 80 billion yen bailout deal, which includes investments from Apple and Hong Kong-based activist investor Oasis Management. The investment, to be completed by August next year at the latest, will give the Chinese group a 49.8% stake in Japan Display, replacing Japanese government-backed fund INCJ as the biggest shareholder. But it remains unclear whether Japan Display can close the deal by the deadline, as the investment is dependent on certain conditions, such as no intervention by Chinese authorities and no major cuts in orders from Apple.
MacDailyNews Take: Hopefully, for beleaguered Japan Display’s sake, this latest cash injection goes through and works this time.