UPDATE 1-Micron sees Elpida deal closing despite challenge

(Rewrites, adds detail on plans, background)

By Noel Randewich

SAN FRANCISCO, Oct 12 (Reuters) - Micron Technology's chief executive said he expects to complete an acquisition of failed Japanese memory chipmaker Elpida Memory Inc. in the first half of next year, despite opposition from a group of bondholders.

Micron agreed in early July to buy Elpida for about $750 million in cash and pay creditors a total of $1.75 billion in annual installments through 2019.

However, a group of Elpida bondholders say Micron is offering too little for the chipmaker.

A committee set up by a Japanese court to examine Elpida's proposal, along with a proposal by the bondholders, is expected to make a recommendation by Oct. 29, later than earlier estimated.

"We Still expect to close this in the first half of 2013. Exactly when that is, I can't say with a lot of precision because I think really the key domino is -- when we get regulatory approval from all the concerned countries," Micron Chief Executive Mark Durcan said at an analysts event in Boise, Idaho, where Micron is based.

The bondholder group, which says it holds about $1.2 billion in Elpida bonds, has submitted a plan to the Tokyo court that values the chipmaker at more than 300 billion yen, well above Micron's offer.

The bondholders did not put forward an equity investor, although they offered to lend Elpida 30 billion yen to help the chipmaker restructure.

"When you think about who has the wherewithal to provide a meaningful return to the secured creditors on a go-forward basis it's the Micron offer," Durcan said. "The other offers out there ... really don't give much assurance that there will be anything for anybody." ($1 = 78.0400 Japanese yen)

(Reporting By Noel Randewich; Editing by Theodore d'Afflisio)

((noel.randewich@thomsonreuters.com)(Twitter handle: @randewich)(415)(677 2542)(Reuters Messaging: noel.randewich.thomsonreuters.com@reuters.net))