Elpida creditors eye possible debt-for-equity exchange

JIJI

Some Elpida Memory Inc. creditors are considering using a debt-for-equity swap to help restructure the failed chipmaker, it was learned Thursday.

With the scheme, 20 Elpida bondholders, including overseas investment funds, intend to join the reconstruction process by accepting Elpida shares on condition that new rehabilitation sponsors are chosen, sources said.

The creditors included the scheme in their own reconstruction program for Elpida, which was submitted to the Tokyo District Court on Aug. 14.

Elpida’s bankruptcy administrators, meanwhile, plan to accept the acquisition offer by U.S. semiconductor maker Micron Technology Inc. The administrators submitted a reconstruction program led by Micron Technology on Tuesday.

The Elpida bondholders claim Micron’s investment of ¥60 billion in Elpida is way too low and submitted their own reconstruction program as a counterproposal.

Against this backdrop, negotiations among Elpida’s stakeholders are expected to be tough because the bondholders are calling for the cooperation of other creditors, including major banks, the sources said.

The counterproposal puts the corporate value of Elpida at over ¥300 billion. It calls for providing ¥30 billion to Elpida in bridge loans, finding new sponsors, such as chipmakers and information technology companies, and swapping bonds held by creditors with Elpida shares so the creditors become responsible for supporting reconstruction.

The 20 creditors hold Elpida bonds worth ¥100 billion, the sources noted.

On the counterproposal, critics said Elpida may go under if new sponsors are not found soon.

Gold-plated microchips

Kyodo

The Tanaka Kikinzoku Kogyo K.K. group began production Friday of gold plating solution for microchips used in liquid crystal display panels made in South Korea.

The noncyanide gold-plating solution, commonly used in the so-called wafer bumping process for making LCD driver integrated circuits, will be made by South Korean chemicals maker Heesung Metal Ltd., which belongs to the Tanaka Kikinzoku group.

Production and supply in South Korea will cut delivery times to local customers in half, the group said Thursday. The solution would normally be produced at Tanaka’s plating solution maker, Electroplating Engineers of Japan Ltd., in Hiratsuka, Kanagawa Prefecture.

Since Electroplating Engineers and Heesung Metal are now managing their own product inventories to minimize supply chain disruption risks, the group will also be able to strengthen its business continuity plan to cope with emergencies.

Electroplating Engineers plans to increase its share in the gold-plating solution market in South Korea to around 80 percent by 2015, compared with about 60 percent now.

Hon Hai boss to visit

Terry Gou, chairman of Hon Hai Precision Industry Co., a Taiwanese partner of Sharp Corp., will visit Japan next week, an official said Thursday.

According to a Hon Hai spokesman, the primary purpose of Gou’s visit is to take a delegation from Taiwan’s Ministry of Economic Affairs on a tour of a Hon Hai-affiliated Sharp plant in Sakai, Osaka Prefecture.

With Hon Hai and Sharp expected to issue a joint statement by the end of the month on their review of the terms of Hon Hai’s investment in Sharp, Gou will likely meet with Sharp executives to discuss the final details.