Troubled Apple supplier Japan Display to seek funding, shares surge

Japan Display Inc's logo is pictured at its headquarters in Tokyo, Japan, August 9, 2016. REUTERS/Kim Kyung-Hoon/File Photo

(This April 1 story corrects the full name of OLED in paragraph 2)

TOKYO (Reuters) - Apple supplier Japan Display Inc said on Monday it aims to raise as much as $990 million in new financing as early as this week, sending shares of the struggling manufacturer sharply higher.

Japan Display, one of the world’s top vendors of liquid crystal display (LCD) panels used in iPhones, has been battered by Apple’s shifting fortunes. It has been particularly hurt by a slowdown in iPhone sales and a proliferation of new models that use newer, organic light-emitting diodes (OLED).

Japan Display said it is aiming for a total capital increase of 110 billion yen ($990 million). As much as 80 billion yen of that would be through issuance of stocks and bonds to external investors, an agreement it aimed to reach this week, it said.

It did not name the external investors, although two sources with direct knowledge of the matter had previously told Reuters it was looking to an investor group, led by China Silkroad Investment Capital, for a bailout.

The remainder of the financing would come through preferred shares to refinance existing debt held by its largest shareholder, the state-backed INCJ Ltd, Japan Display said in its statement.

Japan Display, formed in 2012 in a government-backedmerger of the ailing display units of Sony Corp,Toshiba Corp and Hitachi Ltd, flagged its fifth straight year of net losses in February.

Shares of Japan Display rose as much as 16 percent in early trade on Monday and were up 13 percent at 78 yen as of 0211 GMT.

Reporting by Junko Fujita; Editing by David Dolan and Neil Fullick