Technology Other News 10 Aug 2019 Apple’s display ma ...

Apple’s display maker suffers USD 786.53 million loss

REUTERS
Published Aug 10, 2019, 10:36 am IST
Updated Aug 10, 2019, 10:36 am IST
The liquid crystal display (LCD) maker for smartphones, which gets more than half of its revenue from Apple.
The ballooning loss, including a 51.4 billion yen write down on an LCD plant, made its net worth negative, with liabilities exceeding assets.
 The ballooning loss, including a 51.4 billion yen write down on an LCD plant, made its net worth negative, with liabilities exceeding assets.

Cash-strapped Japan Display Inc reported a tenth consecutive quarterly loss and a negative net worth, hit by weak iPhone sales at Apple Inc, 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 (USD 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 write down 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.

“We are aiming to resolve the negative net worth by making best use of the planned cash injection,” Chief Financial Officer Minoru Kikuoka told an earnings briefing on Friday.

The Japanese company plans to hold a shareholders’ meeting on Sept. 27 to formalise the bailout plan.

The investment, to be completed by August next year at the latest, will give the Chinese group a 49.8 per cent  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.

Analysts say Apple may be ditching LCD screens in favour of thinner, more flexible OLED (organic light-emitting diode) displays as early as next year, an additional blow to the Japanese company whose late shift to OLED screens has already cost it orders from its biggest customer.

Japan Display first agreed on the bailout deal with the Chinese group in April, but was forced to change the structure as some members of the group walked away after making checks on Japan Display’s financials.

The investor group was scheduled to hold a joint press conference on Friday, but abruptly cancelled it. CFO Kikuoka cited health issues of Winston Henry Lee, the leader of the group, as the reason for the cancellation.

Click on Deccan Chronicle Technology and Science for the latest news and reviews. Follow us on Facebook, Twitter

...




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT