Japan Display Inc., which supplies liquid-crystal displays to Apple Inc. (AAPL:US), plans to raise as much as 200 billion yen ($2 billion) in an initial public offering with a government fund maintaining control after the IPO, according to a person with direct knowledge of discussions.
Government-backed Innovation Network Corp. of Japan will retain more than a third of the company, which will have a market value of as much as 800 billion yen, the person said, asking to not be identified as the matter is private. The IPO may take place before the end of March 2014 and some underwriters have been selected to oversee the sale, the person said.
Japan Display was set up last year when Sony Corp. (6758), Toshiba Corp. (6502) and Hitachi Ltd. (6501) spun off their businesses to the government-backed fund after struggling to compete with South Korea’s Samsung Electronics Co. (005930) in the TV display market. The world’s largest maker of LCDs used in mobile devices is expanding a factory that makes panels for smartphones and tablet computers as the yen’s weakness helps spur overseas demand.
“It’s needed for Japan Display to raise funds for its R&D and production capacity expansion,” said Keita Wakabayashi, an analyst at Mito Securities Co. in Tokyo. “Demand for mid- to small-size LCD panels will still increase as the mobile market is expanding.”
Chie Tanaka, a spokeswoman for Japan Display, declined to comment on any potential IPO. Nikkei reported earlier today that Japan Display may go public this fiscal year.
INCJ invested 200 billion yen in Japan Display for its controlling 70 percent stake. Sony, Toshiba and Hitachi each own 10 percent. All the companies are based in Tokyo.
The government fund set a target for a Japan Display IPO by the year ending March 2016 with a goal to boost sales to at least 750 billion yen for that year, INCJ said when the venture was announced in 2011.
Japan Display may post sales between 700 billion yen and 800 billion yen in the year started April 1, from about 450 billion yen last fiscal year, President Shuichi Otsuka said in a May interview. The company wants to expand sales of displays used in cars such as instrument panels, Otsuka said at the time.
The display maker, which employs about 6,200 workers, has five factories in Japan and five overseas, according to its website.
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