JOLED announced on March 27 that it had filed a petition for the initiation of civil rehabilitation proceedings with the Tokyo District Court. At the same time, it is also revealed that he has signed a “basic agreement” with Japan Display regarding support to revive JOLED’s technology development business.
JOLED started business in January 2015 by integrating the organic display development divisions of Sony and Panasonic with the aim of accelerating the development of mass production and early commercialization of organic EL displays.
In November 2019, the world’s first printed organic display mass production line was put into operation at Nomi Plant. At the same time as producing high-quality, high-performance organic EL displays for high-end monitors, medical monitors, and vehicle use, we have also promoted research and development for the practical application of flexible displays and foldable displays.
However, it took more time and costs than expected to achieve stable production. In addition to the impact of the global shortage of semiconductors, demand for high-performance, high-quality displays was slow, and price competition intensified. cash outflows continued at the same time as earnings were slow.
In light of this situation, the company raised money several times and worked to improve earnings, while at the same time continuing to look for sponsors to support the business.
However, it is difficult to get sponsor support without going through legal procedures, and even if legal procedures are taken, it is difficult to continue the product business business based on the manufacturing premise in Nomi Plant and Chiba Plant. “If we continue the business alone, it will be difficult to find the cost to withdraw from Nomi and Chiba’s offices, and we expected to cause a great deal of inconvenience to everyone in the area, we have decided that it is most appropriate to rehabilitate our business with the involvement of the court, and it is inevitable that we have filed a petition for the initiation of civil rehabilitation proceedings.” He explains the circumstances before the legal application.
In the basic agreement signed with Japan Display, they agreed to receive sponsor support for JOLED’s technology development business. JOLED’s technology development business is to be rebuilt with the support of Japan Display.
On the other hand, in terms of the product business (manufacturing and sales departments), maintenance and continuity require a large amount of cost, and “there is no path to an early and drastic improvement in profitability, and we cannot continue with the this business any more. “It’s difficult,” and he went back.
JOLED said, “With the participation of the court and the supervisory board, all the officers and employees will work together to revive our business, so we ask for your understanding and support.”
Japan Display also explained the reason for the support
At the same time, Japan Display also issued a statement titled “Announcement of Basic Agreement Regarding Sponsor Support for JOLED”. In it, he explains the background and reasons for supporting JOLED.
Under the “METAGROWTH 2026” growth strategy announced in May 2022, Japan Display is currently working to further strengthen its “world’s first and best” proprietary technologies, secure a competitive advantage, and improve the profitability of next-generation OLED “eLEAP”, ” which is one of the growth drivers of “METAGROWTH 2026” and is the world’s first maskless vapor deposition and photolithography method, also due to start mass production next year.
We have determined that the succession of human resources and OLED intellectual property rights and know-how in the JOLED technology development business will “contribute to the further expansion and acceleration of ‘METAGROWTH 2026’ and contribute to the creation of customer and shareholder value.” a basic agreement was reached to provide sponsor support. In the future, due diligence will be carried out, and discussions will be held in the direction of concluding a final contract relating to the sponsor.
As mentioned above, JOLED has decided to withdraw from the product business (manufacturing and sales divisions), so this business is not subject to the transfer. In addition, Japan Display had acquired 15% of the company’s shares when JOLED was established, but as part of structural reforms, it transferred all shares in March 2020. There is no capital relationship.