Renesas to Raise Up to ¥200 Billion in New Capital

TOKYO--Renesas Electronics Corp. (6723.TO) said Monday it will raise up to ¥200 billion ($2.44 billion) in fresh capital from a government-backed fund and a group of Japanese manufacturers.

The struggling chipmaker will issue new shares to the Innovation Network Corp. of Japan and eight client firms of Renesas including Toyota Motor Corp. (7203.TO) and Panasonic Corp. (6752.TO) for Y120 per share.

The INCJ will inject around Y140 billion and take a two-thirds stake in the chipmaker while Renesas customers will provide a total of around Y12 billion -- for around a 5% stake in the company. Renesas said the INCJ is also prepared to provide Y50 billion in additional investment or loans.

The bid by INCJ and Renesas customers trumped a competing Y100 billion ($1.2 billion) bid from New York-based fund KKR & Co. (KKR).

Originally established in 2003, Renesas was a product of successive mergers of the chip units of Hitachi Ltd. (6501.TO), Mitsubishi Electric Corp. (6503.TO) and NEC Corp. (6701.TO). Despite a 30% share in the global market for microcontroller chips, the world's No. 5 chipmaker by revenue has struggled to cope with falling chip prices and competition from overseas rivals.

Write to Kana Inagaki at [e-mail]

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