LONDON Ė Hitachi and Mitsubishi Electric, two of the three major shareholders in struggling Japanese chip company Renesas Electronics Corp., have agreed in principle to provide a support package worth 50 billion yen (about $630 million), according to a Reuters report that referenced unnamed sources.
However, Renesas is thought to need about $1.3 billion to implement its plan to cut about 30 percent of its staff and close more than half its domestic factories. NEC, the third and largest shareholder, is unable to contribute with loans as it is struggling with the implementation of its own turn-around plan, the report said.
Renesas would be able to gain an additional line of credit worth 50 billion yen (about $630 million) from its banks, the report said. The main stumbling block at the moment would appear to be reaching agreement on a bail-out package that is equitable between the three major shareholders.
Meanwhile private equity companies Kohlberg Kravis Roberts & Co. (KKR) and Silverlake are reportedly in discussions about investing in Renesas.
KKR and Silverlake were part of a consortium that paid 6.4 billion euro (about $8 billion) for an 80 percent stake in chip company NXP as it was spun out of Koninklijke Philips Electronics NV (Amsterdam, The Netherlands) in 2006. In 2009 their holding was written down to just 10 percent of its original value.
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