Court decides to start Elpida rehabilitation procedure

Kyodo

Semiconductor maker Elpida Memory Inc. said Friday the Tokyo District Court will initiate rehabilitation procedures for it and its Akita Elpida Memory Inc. unit, both of which filed for bankruptcy protection Feb. 27.

Adopting a debtor-in-possession rehabilitation that allows the firm’s present directors to retain control of the firm, the court named Elpida President Yukio Sakamoto and a lawyer as bankruptcy receivers.

Elpida is expected to select its rehabilitation supporter around May and submit a rehabilitation plan to the court by Aug. 21, industry sources said.

In the selection, the company plans to hold the first bidding within this month and the second one in April, they said.

Candidates for the supporter include U.S. computer chip maker Intel Corp., Taiwan Plastic Group and Toshiba Corp., as well as Micron Technology Inc. of the United States, with which Elpida had negotiated a capital and business alliance.

Elpida, the only dynamic random access memory maker in Japan, received a government investment in 2009 to enhance its financial base. But its earnings later deteriorated on DRAM price drops amid a supply glut and the yen’s prolonged strength.