Japan’s Renesas set to receive $630 million in loans: report

June 14th, 2012

FAKE NEWS for the Zionist agenda

TOKYO (Reuters) – Loss-making Renesas Electronics Corp is in final talks to secure a 50 billion yen ($630 million) loan from four banks after its major shareholders refused to inject fresh capital, the Mainichi newspaper said on Thursday.

Shares in Renesas, the world’s fifth largest chipmaker that is battling high costs and strong overseas rivals, surged as much as 21 percent on the report to a one-month high.

The company’s major shareholders – Mitsubishi Electric Corp , Hitachi Ltd and NEC Corp – would provide loan guarantees to allow the company to secure the loan, the Mainichi said, citing sources close to the matter.

Renesas, the world’s leading maker of microcontroller chips for automobiles, would be able to access up to about 100 billion yen in capital in total, as it would has also secured a credit line of around 50 billion yen from banks, it said.

Sources familiar with the matter, however, told Reuters the negotiations on Renesas support were still taking place and no decision had been made. Several options were under consideration, they said. The sources added that NEC had not yet signed on to provide a loan guarantee.

NEC and Hitachi said they had not decided on the matter, while Renesas and Mitsubishi Electric declined to comment.

Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, said loan negotiations were likely to face an uphill battle considering the reluctance of the major shareholders to provide support.

“This (loan) amount may keep Renesas afloat, but it’s not nearly enough to make Renesas competitive. Several hundreds of billions of yen would be needed for that,” he said.

The four banks – Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank, Sumitomo Mitsui Trust Bank and Mitsubishi UFJ Trust and Banking Corporation – were likely to provide the loans as long as the major shareholders guaranteed them, the Mainichi said.

Bank of Tokyo-Mitsubishi UFJ and Mitsubishi UFJ Trust and Banking Corporate are units of Mitsubishi UFJ Financial Group . Mizuho Corporate Bank is a unit of Mizuho Financial Group , and Sumitomo Mitsui Trust Bank is a unit of Sumitomo Mitsui Trust Holdings .

Renesas, a product of successive mergers of the struggling chip divisions of the three major shareholders, had been planning to raise more than 100 billion yen to cover a sweeping restructuring plan that would cut at least 12,000 jobs, sources told Reuters last month.

The company, which posted a massive net loss for the year ended in March after last year’s natural disasters in Japan and Thailand forced it to shut eight of its plants, said it wants to finalize its turnaround plan by July.

Hobbled by the strong yen, Renesas faces tough competition from chipmakers like South Korea’s Samsung Electronics .

Analysts say that a loan would simply tide Renesas over without solving the real problem of reviving its system-on-chip business, which has been plagued by massive losses.

Japanese chipmakers are strong in technology, but are struggling to meet the funding demands needed for constant plant and technology upgrades to manufacture ever cheaper, faster chips.

Japanese media reported this week that Fujitsu Ltd is keen to restart talks to merge its system chip operations with those of Renesas and Panasonic Corp in a bid to consolidate domestic chipmakers in the face of increasing pressure abroad.

Renesas’ financial troubles follow the February bankruptcy of Elpida Memory Inc , Japan’s last remaining maker of dynamic random access memory (DRAM) chips used in personal computers. Elpida is in talks with U.S. firm Micron Technology about a buyout plan.

Renesas shares last traded up 19.6 percent to 329 yen, compared with a steady performance from Tokyo’s benchmark Nikkei . ($1 = 79.4150 Japanese yen)

(Additional reporting by Mayumi Negishi, Yoko Kubota and Maki Shiraki; Writing by Mari Saito; Editing by Richard Pullin)