Japan's Renesas jumps on news of deal
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TOKYO, Nov 26 AFP
November 26 2012, 1:35PM
Shares in Japan's Renesas Electronics jumped some 10 per cent on Monday on reports that its three major shareholders and a government fund reached a final accord on the embattled chipmaker's bailout.
The stock was up 9.68 per cent at 317 yen in mid-morning trade on the Tokyo Stock Exchange, after soaring 15.9 per cent earlier in the day.
The Nikkei economic daily and other media reported on Monday that the troubled chipmaker's three largest shareholders have agreed to a purchase of the firm by the government-backed Innovation Network Corp. of Japan (INCJ).
Details will be announced early next month, they said.
The government fund in late October proposed a state-led bailout of Renesas to the three shareholders -- NEC, Hitachi and Mitsubishi Electric, the Nikkei said.
The INCJ demanded that Renesas slash its work force by another 5,000 or so as part of the bailout deal, asking the three largest shareholders to take on around 1,000 of these workers, it said.
The trio have agreed to the work force cuts and other terms, while the INCJ will pay more than Y180 billion ($A2.10 billion) to obtain two-thirds of Renesas's shares, it said.
Eight manufacturers that procure chips from Renesas, including Toyota Motor, Nissan and Canon will invest more than Y10 billion ($A116.74 million) combined to take a total interest of around five per cent, it said.
NEC, Hitachi and Mitsubishi Electric, which now hold a combined 90 per cent stake in Renesas on a voting-rights basis, will become minority shareholders once the INCJ takes over, it said.
Renesas is the world's top supplier of microcontrollers, which function as the brain of cars and many electronics products.
It holds a 17 per cent global share but has struggled with a strong yen and fierce competition from foreign rivals.