SAN FRANCISCOJapanese DRAM vendor Elpida Memory Inc. plans to raise capital to shore up its finances by selling shares in two of its businesses, the company said Wednesday (Marc 25).
Elpida (Tokyo) said it decided at a general shareholder meeting Wednesday to arrange private placement of shares of the two ventures with Elpida and several of its partners, described as three Japanese and two non-Japanese companies that understand Elpida's future prospects in the DRAM industry.
Elpida said it expects the sale of shares to net about 45.9 yen (about $465.2 million).
The Wall Street Journal reported Thursday that payment for the shares, due Friday, will enable Elpida to meet debt-covenant requirements by March 31, the end of the company's fiscal year.
The Wall Street Journal reported that Japanese test equipment vendor Advantest Corp. and photomask supplier Toppan Printing Co. have disclosed plans to buy shares in the Elpida units, as has Taiwan's Powertech Technology Inc.
The Elpida subsidiaries at issue were both established March 2, according to a statement by Elpida. They are called EBS Inc., described as "outsourced business from Elpida among other business," and ECM Inc., described as providing sales of chips manufactured by Elpida. Further details about the subsidiaries were not immediately available.
"We are grateful to the business partners and others involved in arranging the placement for their understanding and cooperation in helping to make possible significant improvements in the company's financial position," said Yukio Sakamoto, Elpida president and CEO, in a statement.
Earlier this month Elpida reported a quarterly sales decline of 46 percent sequentially on sales of 61.8 billion yen ($630.3 million). The company posted a net loss of 72.3 billion yen ($737.3 million) in the quarter.
Elpida will sell 100 percent of the EBS unit through the placement and 10 percent of the ECM unit, the company said.
Buyers of the shares have agreed to several conditions, including not transferring the shares to a third party, Elpida said.
Also Wednesday, Elpida said it acquired common shares of Tera Probe through an exchange of class A shares and established the chip testing unit as a consolidated subsidiary.