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Mitsubishi, Hitachi okay Renesas support package

Posted: 22 Jun 2012 ?? ?Print Version ?Bookmark and Share

Keywords:Renesas? turnaround plan? financial troubles?

Two of Renesas Electronics Corp.'s shareholders, Mitsubishi Electric Corp. and Hitachi Ltd, have agreed to provide a support package worth around $630 million (?50 billion), says a report by Reuters.

NEC Corp., the company's third and largest shareholder, will not be able to contribute with loans as it is also struggling with the implementation of its own turnaround plan, the report added.

However, Renesas still needs around $1.3 billion to implement its plan to cut around 30 percent of its workforce and close more than half of its domestic factories, Reuters noted.

Renesas would be able to gain an additional line of credit worth about $630 million (?50 billion) from its banks, the report said. The main stumbling block at the moment would appear to be reaching agreement on a bail-out package that is equitable between the three major shareholders.

Meanwhile, private equity companies Kohlberg Kravis Roberts & Co. (KKR) and Silverlake are reportedly in discussions about investing in Renesas.

KKR and Silverlake were part of a consortium that paid about $8 billion (?6.4 billion) for an 80 percent stake in chip company NXP Semiconductors NV as it was spun out of Koninklijke Philips Electronics NV in 2006. In 2009 their holding was written down to just 10 percent of its original value.

- Peter Clarke
??EE Times

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