by Staff Writers
Tokyo (AFP) June 26, 2012
The head of Japan's Renesas Electronics said Tuesday that the struggling chipmaker's biggest shareholders have agreed to its request for financial aid, but declined to say how much they would kick in.
President Yasushi Akao told the firm's annual shareholders meeting that he has asked and won agreement for help from technology giants NEC, Hitachi and Mitsubishi Electric, along with Renesas's creditor banks.
"The three top shareholders have expressed their basic agreement to our request for necessary capital. We are still discussing details and conditions," Akao told the meeting held in Kawasaki City, near Tokyo.
His comments confirmed reports that its biggest investors, which own about 90 percent of its shares, would help the firm that was created by the merger of their own chip divisions over the past decade.
However, Akao declined to confirm Japanese media reports that Renesas, one of the world's biggest chipmakers, would see a capital injection of about 100 billion yen ($1.25 billion).
He also remained tight-lipped on a corporate overhaul that will reportedly see the loss of up to 14,000 jobs, or about one-third of its workforce.
There was also no mention of a Nikkei business daily story at the weekend that said Renesas would issue roughly 50 billion yen in new shares to US investment firm Kohlberg Kravis Roberts.
Further details about the capital injection and restructuring would be announced before the firm's quarterly earnings next month, Akao said.
In May, Renesas said it would boost the outsourcing of its chip production to Taiwan Semiconductor Manufacturing Co., including a bigger share of its output of microcontrollers -- key components in vehicles and home appliances.
On Tuesday, Akao said Renesas would accelerate a shift of its manufacturing overseas and boost outsourcing in a bid to increase the firm's competitiveness.
Renesas lost 62.6 billion yen in the year to March as Japan's microchip sector struggles with a strong yen and fierce competition, especially from South Korean and Taiwanese rivals.
Japanese manufacturers were also hit by last year's quake-tsunami disaster.
On Tuesday, Renesas shares were 5.23 percent lower at 307 yen in Tokyo afternoon trade.
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