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Japan Display rescue could be blocked by US security review



The rescue plan for Japan Display – a supplier of LCD screens for Apple which needed a major investment to boost its move into OLED – is set to be worth a total of 232 billion yen ($ 2.1B).

However, there is a possibility that the bailout could be blocked by a US national security review…

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Reuters reports that the bailout is much larger than expected

A Chinese-Taiwanese group will Apple control panel supplier Japan Display after pumping in funds as part of a 232 billion yen ($ 2.1 trillion) bailout plan for the troubled display panel maker.

The rescue comes after previous, publicly funded bailouts failed to help the company cut its dependence on Apple, whose slowdown [LCD] iPhone sales have hitly hit Japan Display.

The deal will make the buyers Japan Display's biggest shareholders – with a 49.8 percent stake – replacing the Japanese government-backed INCJ fund and effectivel y ending the government's efforts to keep the last remaining domestic display maker out of foreign hands.

Earlier speculation had been around significantly lower figures. We've seen reports of $ 500-700M, $ 723M and, most recently, just under a billion dollars.

Taiwanese display maker TPK Holding and Chinese investment firm Harvest Group are also on the deal, with the Japanese government's INCJ – which provided a previous bailout – agreeing to swap its preferred equity equity in the company.

Interestingly, Reuters suggests that the Japan display rescue deal could potentially be blocked by a US national security review. ] Japan Display has a subsidiary in San Jose, US Business that could give the Committee on Foreign Investment in the United States (CFIUS) jurisdiction over the deal.

Displays may not necessarily be critical technologies that are export controlled, but some of Japan's technologies such as fingerprint sensors could raise to national security concern, said Nancy Fischer and Matthew Rabinowitz, partner and senior associate, respectively, at US-based law firm Pillsbury.

Minoru Kikuoka, Japan Display's finance division head, told reporters at a briefing that the company's legal advisors have said a CFIUS filing would not be necessary. CFIUS, however, retains indefinite jurisdiction to request filing and review the transaction, even after the closes.

This is a likely prospect, but it is yet another twist in the convoluted story of one of Apple's vendor's attempts to

 Photo: Shutterstock </em></p>
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