Renesas shareholders reach bailout deal

Shareholders of the ailing Japanese chipmaker approve a $2.4 billion buyout from the Japanese government fund, with additional capital from eight clients and other major shareholders.
Written by Ellyne Phneah, Contributor

Shareholders from Renesas Electronics have approved a government-led bailout which will acquire two-thirds of the ailing Japanese chipmaker.

Citing the Nikkei newspaper, Reuters reported Sunday the deal had been expected but delayed and an official announcement will be made early December. As part of the deal, a Japanese government fund will spend 180 billion yen (US$2.4 billion) to acquire a two-third stake in Renesas.

Eight manufacturers including key clients Toyota Motor and Nissan Motor will provide another combined 20 billion yen (US$243 million). In addition, Renesas will receive an additional 1 billion yen (US$12.2 million) each from shareholders Hitachi and NEC, while Mitsubishi--also a shareholder--will take in a few hundred Renesas employees.

When approached by the news site, Renesas said nothing has been decided.

Renesas has projected a net loss of 150 billion yen (US$1.8 billion) for the year ending March 2013. The ailing Japanese company has since taken steps to trim losses and increase capital including slashing 5,000 jobs in July, receiving an investment of US$1.27 billion from U.S. private equity fund, KKR, in August, and slashing 17 percent of its global worforce last month through an early retirement program to save (US$689 million).

Meanwhile, the company's shares traded 6.2 percent higher at 307 yen (US$3.73) on Monday morning, compared to a 1.2 percent rise for the Nikkei benchmark, the report said.

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