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Fund may join big firms to buy Renesas
Source: Bloomberg News |
September 24, 2012, Monday
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Print Edition
Print Edition
JAPAN'S state-backed corporate rescue fund may join the nation's largest manufacturers to take over Renesas Electronics Corp, countering a bid by US private-equity firm KKR & Co for the unprofitable chipmaker.
Innovation Network Corp of Japan may offer financial support to Renesas if asked, an executive of the investment fund said on Saturday, declining to be identified because of company policy.
Japanese industrial powers including Toyota Motor Corp and Panasonic Corp will join with the fund to invest over 100 billion yen (US$1.3 billion) for a majority stake in Renesas, the Nikkei newspaper reported.
KKR offered about 100 billion yen to banks and the three main shareholders NEC Corp, Hitachi Ltd and Mitsubishi Electric Corp for control of Renesas, a person who know of the matter said last month. Shares of the Kawasaki-based firm, down 46 percent this year, surged by a record in Tokyo after reports of the bid.
Renesas, whose customers include Apple Inc and Nintendo Co, is trying to end losses exacerbated by falling demand for its system LSI chips, used for functions ranging from processing images for TV screens to crunching data. It plans to cut 5,000 jobs and may close or sell nine of 18 domestic factories to help end losses.
Financial support
NEC, Hitachi and Mitsubishi Electric in July said they would provide 49.5 billion yen in loans to Renesas. Banks including Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Trust Holdings Inc have agreed to continue offering about 50 billion yen in lines of credit to the chipmaker, two people who know of the matter said in May.
Japan's chipmakers have struggled as South Korea's Samsung Electronics Co extended its dominance. Idaho-based Micron Technology Inc agreed in July to buy Tokyo-based Elpida Memory Inc after Elpida filed for bankruptcy protection.
Innovation Network has been studying ways to revive Japan's chipmaking industry, the fund executive said on Saturday.
Innovation Network Corp of Japan may offer financial support to Renesas if asked, an executive of the investment fund said on Saturday, declining to be identified because of company policy.
Japanese industrial powers including Toyota Motor Corp and Panasonic Corp will join with the fund to invest over 100 billion yen (US$1.3 billion) for a majority stake in Renesas, the Nikkei newspaper reported.
KKR offered about 100 billion yen to banks and the three main shareholders NEC Corp, Hitachi Ltd and Mitsubishi Electric Corp for control of Renesas, a person who know of the matter said last month. Shares of the Kawasaki-based firm, down 46 percent this year, surged by a record in Tokyo after reports of the bid.
Renesas, whose customers include Apple Inc and Nintendo Co, is trying to end losses exacerbated by falling demand for its system LSI chips, used for functions ranging from processing images for TV screens to crunching data. It plans to cut 5,000 jobs and may close or sell nine of 18 domestic factories to help end losses.
Financial support
NEC, Hitachi and Mitsubishi Electric in July said they would provide 49.5 billion yen in loans to Renesas. Banks including Mitsubishi UFJ Financial Group Inc, Mizuho Financial Group Inc and Sumitomo Mitsui Trust Holdings Inc have agreed to continue offering about 50 billion yen in lines of credit to the chipmaker, two people who know of the matter said in May.
Japan's chipmakers have struggled as South Korea's Samsung Electronics Co extended its dominance. Idaho-based Micron Technology Inc agreed in July to buy Tokyo-based Elpida Memory Inc after Elpida filed for bankruptcy protection.
Innovation Network has been studying ways to revive Japan's chipmaking industry, the fund executive said on Saturday.
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