Elpida Memory Inc. plans to raise ¥79.7 billion selling shares and convertible bonds.
The world’s third-largest maker of computer-memory chips plans to sell 57.3 million new shares, equivalent to 27 percent of Elpida’s outstanding stock, for about ¥52.2 billion by as early as July 25, the company said.
The company also said it plans to sell ¥27.5 billion in convertible bonds, with the interest rate being decided Friday.
Elpida, bailed out by the government in 2009, fell as much as 15 percent in Tokyo trading on concern the sale will dilute the value of existing shares.
It’s the unprofitable company’s sixth fundraising plan since 2009 to invest in factories to keep up with Samsung Electronics Co., which spends about $10 billion annually to widen its lead in the production of memory chips.
“The company is selling way too many shares,” said Yoshihiro Ito, chief strategist at Okasan Online Securities Co. “Individual investors must have sold shares on that news.”
Elpida plans to sell 18.3 million of the shares to local investors and as many as 39 million to overseas investors, according to the company.
Elpida plunged 13 percent to close at ¥787 on Monday, reducing the chipmaker’s market value to ¥168.8 billion.
The five-year convertible bonds will be offered at 102.5 percent of the face value and pay interest of 0.5 percent to 0.9 percent, Elpida said.
Daiwa Securities Capital Markets Co., Morgan Stanley MUFG Securities Co., Nomura Securities Co., Mizuho Securities Co. and SMBC Nikko Securities Inc. were hired for the sale.
Last year, the company said it plans to sell ¥60 billion in convertible bonds to local private investors. Earlier this year, Elpida sold 4.26 billion New Taiwan dollars ($148 million) of Taiwan depositary receipts to fund research and development. The company’s shares began trading in Taipei this year.
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