Troubled Elpida to Draw Up Rehab Plan in 6 Weeks
Japanese chipmaker Elpida Memory, which has filed for bankruptcy protection, will draw up a rehabilitation plan within six weeks as it works to slash debt quickly to appeal to potential turnaround sponsors, the Nikkei said on Wednesday.
The world's third-largest maker of dynamic random access memory (DRAM) chips hopes to get back on its feet by deciding on a sponsor firm by mid-April but might face problems because it filed for bankruptcy without consulting key lenders first, the business daily reported.
In comparison, Japan Airlines Corp took eight months before submitting their rehabilitation plan after filing for bankruptcy protection in 2010.
Elpida filed for protection from creditors on Monday with $5.6 billion in debt after potential partners failed to come through to rescue the cash-strapped chipmaker.
The rehabilitation plan is to include specifics such as the percentage of debt the company will repay. Yukio Sakamoto is to stay on as president if key creditors approve, the newspaper reported.
A company spokesman declined to comment on the report.
The chipmaker had been in talks on a capital and business partnership with Micron Technology since the end of 2011, and the U.S. chipmaker is seen as the leading candidate to sponsor Elpida's rehabilitation, the Nikkei said.
There have also been reports that Japan's government is looking to combine the struggling system chip operations of Renesas Electronics, Fujitsu and Panasonic , with production outsourced to GlobalFoundries, a California-based company that could buy Elpida's chip plant in Hiroshima as part of that deal.
Elpida, which accounts for 12 percent of global DRAM output, has been struggling with a slump in chip prices as consumers increasingly bypass PCs for products like Apple's iPad, which primarily uses flash memory instead of DRAM.
On Tuesday, Micron announced it would pay $600 million to buy back Intel's stake in two factories that make flash memory chips.
Elpida is also saddled with heavy capital spending to keep pace with market leaders Samsung Electronics and Hynix Semiconductor, while a strong yen undercut its global competitiveness.
Shares of Elpida were untraded with a glut of sell orders.