Japan Display Inc., said it has entered into an alliance with Suwa Investment Holdings, LLC and TPK Holding Co., Ltd., to give control and ownership of the company to the Chinese-Taiwanese consortium.
The struggling mobile phone display maker for Apple will receive cash injections of up to 80 billion yen into Japan Display by buying shares and bonds.
INCJ will also join the bailout by accepting a debt-to-preferred equity swap totaling 75 billion yen and extending senior loans worth 77 billion yen. After the deal, its stake will fall to 12.7 percent from 25.3 percent.
The deal could potentially be subject to a U.S. national security review at a time when Washington is stepping up its scrutiny on Chinese investment in the United States.
Japan Display has a subsidiary in San Jose, a U.S. business that could give the Committee on Foreign Investment in the United States (CFIUS) jurisdiction over the deal.
The slow down in Apple’s mobile sales has badly affected the fortunes of Japan Display and the latest takeover by the China-Taiwanese consortium is its lifeline.