Three foreign funds eye investing in struggling chipmaker Renesas

Kyodo

Three overseas investment funds are considering buying a stake in struggling chipmaker Renesas Electronics Corp., which seeks funds to carry out the closure of domestic plants and other restructuring, sources said Tuesday.

NEC Corp. and two other major shareholders of Renesas and its main creditor banks are meanwhile expected to agree within days on providing ¥100 billion in financial assistance, the sources said.

To rebuild its business, the semiconductor maker, which controls about 40 percent of the global market for microcontrollers for automobiles, will make arrangements to integrate its slumping system chip operations with those of Panasonic Corp. and Fujitsu Ltd., the sources said.

Renesas is expected to need tens of billions of yen in additional capital to conduct large-scale restructuring and make investments in its mainstay microcontroller business. But the major shareholders, which also include Hitachi Ltd. and Mitsubishi Electric Corp., remain cautious about taking larger stakes in Renesas.

As the company looks for new investors, a U.S. fund and others have shown interest in making investments, the sources said.

With regard to the ¥100 billion in financial assistance, four banks will provide ¥50 billion in loans. The three major shareholders will lend the remaining ¥50 billion, as NEC, which is also facing a business slump, has agreed to shoulder part of the financial burden, the sources said.

Renesas plans to use the funds to turn around its business through restructuring measures, including cutting up to around 14,000 jobs, or about 30 percent of its entire workforce, and close or sell half of its 19 domestic plants.