Japan Display Inc. announced Monday that TPK Holding Co. will quit a Taiwan-China consortium planning to offer financial backing to the major manufacturer of liquid crystal panels.
JDI will continue talks primarily with Chinese investment fund Harvest Tech Investment Management Co., one of the three members of the consortium. Nevertheless, the latest development has fueled uncertainty over JDI's restructuring.
The pillar of the assistance framework was an 80 billion yen commitment by the consortium to support JDI, with TPK, a major manufacturer of touch panels in Taiwan, to provide 25 billion yen.
According to sources, TPK told JDI that it has deferred its offer of assistance because it struggled to adequately explain its decision to shareholders.
TPK is believed to have expressed concern over JDI's business conditions, which have rapidly deteriorated due to sluggish sales of liquid crystal panels for smartphones, one of the company's main products.
Taiwan investment fund CGL Group, the third member of the consortium, has not informed JDI if it will provide financial assistance and is considered likely to leave the framework.
Harvest Tech, which was scheduled to provide up to about 40 billion yen, has told JDI that it will make an official decision on financial assistance by June 27.
JDI said it still plans to secure up to 80 billion yen, as it expects Harvest Tech to increase its contribution and Hong Kong investment fund Oasis Management Co. to replace TPK in the consortium.
JDI will also hold talks with other groups in Japan and abroad, including companies it previously held discussions with, due to the possibility that the assistance framework might not be finalized by June 27.
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