Rexchip to recoup $22.4M from Elpida

Taiwanese DRAM manufacturer will get back about one-sixth of the US$128.8 million that Elpida owes it, but the payments will be spread over seven years.
Written by Jamie Yap, Contributor

Memory chip manufacturer Rexchip is hoping to recoup about one-sixth of the 10.47 billion yen (US$128.8 million) its parent company, Elpida Memory, owes it following the approval of the latter's financial restructuring plan.

The Taipei Times reported Monday that Rexchip, a joint venture between Elpida and Taiwan's Powerchip Technology, will look to receive about 1.8 billion yen (US$22.4 million) for previous contract DRAM (dynamic random access memory) manufacturing services.

The estimated sum comes after the Tokyo District Court approved Elpida's financial restructuring plan earlier this month, it added. The Japanese company will repay only 17.4 percent of its debts to creditors which have no collateral guaranteeing repayment such as Rexchip, and these payments will be spread over a seven-year period. 

It will, however, pay of all its debts to creditors that have sufficient collateral to protect their rights, the report added.

Rexchip said it has booked provisions covering all of Elpida's debts, and any amount repaid in the future will be treated as non-operating income. The Taiwanese company has a NT$2.6 billion loan (US$88.7 million) due Nov. 20, but has only about NT$500 million (US$17.1 million) in cash on hand currently, it noted.

Elpida filed for bankruptcy protection back in February this year and delisted from the Tokyo Stock Exchange, after it suffered heavy losses amid a sluggish demand in the global DRAM industry. Bloomberg reported the company lost money for five straight quarters and was unable to sustain its debts of 448 billion yen (US$5.5 billion) as it could not get fresh funding.

In July, Micron Technology said it will acquire Elpida for US$2.5 billion.


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