TOKYO, Aug 28 (Reuters) - Japan Display 6740.T said on Friday it has agreed to sell a smartphone screen plant to Sharp Corp 6753.T for $390 million, raising funds to repay debt it owes Apple Inc AAPL.O for the plant construction costs.

The company said in a statement it will also sell screen plant equipment at the central Japan factory to "an overseas customer" for $285 million. Sources have said the customer is Apple.

As Japan Display owes Apple more than $702.5 million for the $1.5 billion cost of building the plant five years ago, Japan Display said the $675 million funds to be raised from the plant and equipment sale would be used for repayment.