The head of Japan’s Renesas Electronics said yesterday that the struggling chipmaker’s biggest shareholders have agreed to its request for financial aid, but declined to say how much they would kick in.
Renesas president Yasushi Akao told the firm’s annual shareholders meeting that he has asked and won agreement for help from technology giants NEC, Hitachi and Mitsubishi Electric, along with Renesas’s creditor banks.
BASIC AGREEMENT
Photo: Bloomberg
“The three top shareholders have expressed their basic agreement to our request for necessary capital. We are still discussing details and conditions,” Akao told the meeting held in Kawasaki City, near Tokyo.
His comments confirmed reports that its biggest investors, which own about 90 percent of its shares, would help the firm that was created by the merger of their own chip divisions over the past decade.
INJECTION
However, Akao declined to confirm Japanese media reports that Renesas, one of the world’s biggest chipmakers, would see a capital injection of about ￥100 billion (US$1.25 billion).
He also remained tight-lipped on a corporate overhaul that would reportedly see the loss of up to 14,000 jobs, or about one-third of its workforce.
NO MENTIONS
There was also no mention of a Nikkei business daily story over the weekend that said Renesas would issue roughly ￥50 billion in new shares to US investment firm Kohlberg Kravis Roberts.
Further details about the possible capital injection and any restructuring plan would be announced just ahead of the firm’s quarterly earnings next month, Akao said.
Last month, Renesas said it would boost the outsourcing of its chip production to Taiwan Semiconductor Manufacturing Co (台積電), including a bigger share of its output of microcontrollers — key components in vehicles and home appliances.
OVERSEAS SHIFT
Yesterday, Akao said Renesas has found it necessary to accelerate a shift of its manufacturing overseas and boost outsourcing in a bid to increase the firm’s competitiveness.
Renesas lost ￥62.6 billion in the year to March as Japan’s microchip sector struggles with a strong yen and fierce competition, especially from South Korean and Taiwanese rivals.
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