Reuters: Technology News: Mitsubishi Electric promises loan to Renesas; chipmaker's shares surge

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Mitsubishi Electric promises loan to Renesas; chipmaker's shares surge Jul 31st 2012, 05:45 Tweet Share this Email Print Related News Japan's Hitachi first-quarter beats forecast, warns of China pain Mon, Jul 30 2012 For Asia's tech giants, clouds before the windows Mon, Jul 23 2012 Japan's Renesas seeks to cut 12 percent of workforce Tue, Jul 3 2012 Analysis & Opinion Intel deal closes circuit to faster chips, growth Deteriorating asset quality strains Indian banks A receptionist passes by the logo of Renesas Electronics Corp at the company's headquarters in Tokyo July 3, 2012. Credit: Reuters/Yuriko Nakao TOKYO | Tue Jul 31, 2012 1:45am EDT TOKYO (Reuters) - Japan's Mitsubishi Electric Corp said on Tuesday it would provide 14.5 billion yen ($185.5 million) in loans to help prop up chipmaker Renesas Electronics Corp, which is fighting for survival against aggressive overseas rivals. Shares in Renesas, the world's No. 1 maker of microncontroller chips used in cars, surged 15 percent to 260 yen following the news. Renesas has struggled to turn a profit in its system LSI chip business as it struggles to compete against rivals such as South Korea's Samsung Electronics Co Ltd. Renesas, a product of successive mergers of the chip divisions of its major shareholders Mitsubishi Electric, Hitachi Ltd and NEC Corp, plans to reduce its workforce by 12 percent and halve the number of domestic plants. "We do not plan to provide any further loans to Renesas (after this)," said Mitsubishi Electric executive officer Hiroki Yoshimatsu at the company's earnings briefing. "With a responsibility to return these loans, they (Renesas) have to steadily move forward their restructuring plan and return the company to profitability and return the loan," he said. The loan will be made on October 1, Mitsubishi Electric said. Mitsubishi Electric, which owns a 25 percent stake in Renesas, declined to comment on the scope and type of support that Hitachi and NEC would provide to Renesas. NEC is due to report its April-June results at 0600 GMT. Mitsubishi Electric shares were up 4.1 percent, compared with a 1.1 percent rise in Tokyo's benchmark Nikkei average. ($1 = 78.1900 Japanese yen) (Reporting by Mari Saito; Editing by Chris Gallagher) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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