Reuters: Technology News: Renesas abandons plan to ask shareholders for capital: report

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Renesas abandons plan to ask shareholders for capital: report Jun 8th 2012, 00:35 TOKYO | Thu Jun 7, 2012 8:35pm EDT TOKYO (Reuters) - Loss-making Japanese chipmaker Renesas Electronics Corp has abandoned a plan to ask its major shareholders for a capital injection and is instead seeking guarantees from them for its loans, the Mainichi newspaper reported on Friday. Renesas, the world's fifth-largest chipmaker and a product of successive mergers of the chip divisions of Mitsubishi Electric Corp, Hitachi Ltd and NEC Corp, has been planning to raise more than 100 billion yen ($1.26 billion) in fresh capital and cut at least 12,000 jobs, sources have said. The Mainichi said that Mitsubishi Electric, Hitachi and NEC have all refused to inject fresh capital. Renesas, which logged a bigger-than-expected net loss for the year ended March 31, is struggling to survive as it faces higher costs and stiff overseas competition. Sources told Reuters last Friday that Renesas president Yasushi Akao visited all three companies personally and presented the firm's plan on the same day, which included sweeping job cuts and fund raising. Options on the table for the major shareholders to support Renesas include capital raising from a share issue, the issuance of subordinated bonds or providing a loan guarantee. A source familiar with the matter told Reuters last week Mitsubishi Electric was not considering providing capital support to Renesas at this time. NEC, which has struggled with steep losses in its mobile handset and IT hardware businesses, has previously said that it was not considering extra capital support for Renesas. Another source said Hitachi would not disclose its stance on the matter. The three companies will discuss the restructuring plan this month. Renesas aims to announce the final turnaround plan by July. A Mitsubishi spokesman declined to comment on the Mainichi report. Spokespeople for Renesas and its other two major shareholders were not immediately to comment. (Reporting by Ayai Tomisawa; Editing by Richard Pullin) Link this Share this Digg this Email Reprints

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