INCJ-led consortium to complete $2.5b Renesas rescue - report
A consortium led by Innovation Network Corporation of Japan (INCJ) is said to be nearing a JPY200 billion ($2.55 billion) deal to buy ailing Japanese chipmaker Renesas Electronic Corp.
According to the Nikkei business daily, state-funded INCJ is expected to put in about JPY150 billion for two-thirds of Renesas' shares, with the remaining JPY50 billion coming from 10 domestic companies. The participating companies include Canon, Denso Corp, Honda Motor, Nikon Corp, Nissan Motor, Panasonic Corp, Toyota Motor Corp. and Yaskawa Electric Corp.
The company's share price climbed 14% to JPY301 during Monday morning trading after news of the offer broke over the weekend. It was previously reported that the INCJ-led group was only considering making an offer in excess of KKR's JPY100 billion bid, made in August.
On October 13, KKR withdrew its offer.
The investment could allow Renesas to turn its fortunes around after falling demand for its system LSI chips and stiff competition from rivals like Samsung Electronics led to losses for the company. The strong yen and rising production costs have also eroded Renesas' competitive position.
The company, whose customers include Apple and Nintendo, forecast a JPY159 billion loss the current fiscal year, having recorded cumulative losses of JPY472 billion in the last seven years.
In July, Renesas' shareholders, which include NEC Corp, Hitachi Capital and Mitsubishi Electric Corp, agreed to provide JPY49.5 billion in loans to cover expenses such as worker buyouts and factory reorganizations.
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