Elpida rehab sponsor bidding postponed

JIJI, Bloomberg

The administrator of Elpida Memory Inc. has postponed the deadline for the second round of bidding to select the failed Japanese chipmaker’s rehabilitation sponsor to May 4 from Friday, as initially scheduled, sources said.

By extending the bidding period by one week, the administrator seems to have urged three camps of prospective sponsors to present more detailed rehabilitation plans, the sources said.

The three are major U.S. chipmaker Micron Technology Inc., South Korea’s SK Hynix Inc. and an alliance of U.S. and Chinese investment funds.

The administrator plans to pick a party as early as the second week of May and give it preferential negotiating rights.

After a sponsor is selected, the administrator hopes to enter into debt-reduction negotiations with Elpida’s creditor banks.

Elpida, the only manufacturer of dynamic random access memory chips in Japan, filed for court protection from creditors under the corporate rehabilitation law in late February, leaving liabilities totaling ¥448 billion, the largest for a failed Japanese manufacturer.

The administrator carried out the first round of bidding at the end of March and narrowed down sponsor candidates to the three.

Though the three parties pledged assistance of ¥100 billion to ¥150 billion each in the first round of bidding, they have tightened some of their terms for accepting the sponsorship, the sources said.

Elpida’s bankruptcy is fueling concern the company could be a burden to an acquirer, with shares of SK Hynix and Micron declining on takeover speculation.

Stock prices of DRAM producers Hynix, Micron and Samsung Electronics Co. have shown significant differences since Feb. 27, when Elpida’s filing sparked speculation the industry might lose 12 percent of its capacity.

The three rivals all rallied in the first few days, then differences emerged. Hynix has plunged 11 percent starting from March 30, after saying it submitted an acquisition bid. Micron declined 21 percent in New York trading through Monday.

By comparison, Samsung has gained 0.2 percent since Hynix’s plan was revealed and about 9.6 percent since the initial bankruptcy filing.