Semiconductor maker Renesas Electronics Corp. plans to seek loans and other forms of support from three major shareholders to turn around its faltering businesses, sources said.
The struggling company is looking to approach NEC Corp., Hitachi Ltd. and Mitsubishi Electric Corp., they said Wednesday, adding the support would include taking on some Renesas workers to help the company streamline its operations.
Renesas was expected to present a business reconstruction plan, including reducing its group workforce by up to 14,000 jobs, at its board meeting Thursday afternoon.
Because the three shareholders raised concerns about Renesas’ plan to raise more than ¥100 billion through a private placement of shares, the chip-maker is now considering seeking subordinated loans instead to make it easier for the three to offer financial support with less involvement in management, the sources said.
There are some advantages to subordinated loans in terms of improving Renesas’ balance sheet as they can be incorporated as part of its capital base because of the low priority placed on repayment, they said.
With repayment of massive bank loans due by the end of June, Renesas plans to finalize the reconstruction plan in time for its shareholders’ meeting slated for June 26, the sources said.
Renesas said earlier this week it will expand its business tieup with Taiwan Semiconductor Manufacturing Co. by outsourcing production of its mainstay microcontrollers as it tries to improve its financial standing.
The company reported a consolidated net loss of ¥62.6 billion for the business year that ended on March 31.