Memorychip maker Rexchip Electronics Corp (瑞晶電子) said on Saturday that it expected its financially troubled parent company, Japan’s Elpida Memory Inc, to repay only about a sixth of the more than ￥10 billion (US$123.12 million) it owes its Taiwanese subsidiary.
Rexchip, a joint venture of Elpida and Taiwan’s Powerchip Technology Corp (力晶科技), said the repayment estimate came after the Tokyo District Court approved the Japanese DRAM maker’s financial restructuring plan earlier this month.
Rexchip now expects to recover about ￥1.8 billion of the ￥10.47 billion Elpida still owes it for previous contract DRAM manufacturing services. Under the court-approved financial restructuring plan, Elpida will repay only 17.4 percent of its debts to creditors like Rexchip that have no collateral guaranteeing repayment. The payment will be made over a seven-year period.
At the same time, Elpida will repay 100 percent of the debts it owes to creditors that have sufficient collateral to protect their rights. Rexchip said the company had booked provisions covering all of Elpida’s debts, and any amount repaid in the future would be treated as non-operating income.
Elpida filed for bankruptcy protection in Tokyo in February because of massive losses suffered as the global DRAM business faces a downturn amid a supply glut.
Shares of Rexchip, another victim of the sluggish DRAM market, have been delisted from the emerging stock market since Nov. 3 after Cathay Securities (國泰證券) and Grand Cathay Securities (大華證券) resigned from their posts as the chipmaker’s advisory securities firms.
The GRETAI Securities Market, which operates the emerging stock market, said the departure reflected concerns over Rexchip’s financial difficulties amid falling demand for DRAM chips.
Rexchip has a NT$2.6 billion loan due tomorrow, but has only about NT$500 million in cash available.
The DRAM company is in talks with its bank creditors over rolling over part of its loans.