U.S.-based Micron Technology Inc. has concluded a deal to support the rehabilitation of failed chipmaker Elpida Memory Inc., the two companies have announced.
Micron will use some ¥200 billion to bail out Elpida, the only dynamic random access memory maker in Japan.
Elpida will aim to rebuild itself by becoming a wholly owned subsidiary of the U.S. firm.
“Micron’s sponsorship of Elpida will enable stable payment of creditor claims and help to streamline approval of the reorganization plan by the creditors and the Tokyo District Court,” said Yukio Sakamoto, Elpida president and joint bankruptcy trustee for the company.
Informed sources said Micron proposed ¥220 billion in aid in the final tender in May to pick a bankruptcy sponsor for Elpida. But it lowered the aid offer to ¥200 billion after assessing the value of Elpida’s domestic bases, according to the sources.
Of the assistance, Micron will spend ¥60 billion to make Elpida its fully owned subsidiary. The rest will be used to repay part of some ¥420 billion in debts Elpida owes to creditor financial institutions and business partners.
Micron will keep intact Elpida’s Hiroshima and Akita plants and maintain jobs at the facilities.
Elpida’s bankruptcy administrators is to submit the reorganization plan to the Tokyo District Court by Aug. 21. The plan will be finalized once it has been approved by both the court and creditors. Elpida was established in 1999.