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Elpida Memory, Akita Elpida unit file reorganization cases in Japan
By Caroline Salls
Pittsburgh, Feb. 29 - Elpida Memory, Inc. and subsidiary Akita Elpida Memory, Inc. filed petitions for the commencement of corporate reorganization proceedings with the Tokyo District Court, according to a news release.
The company said that as a whole it aims to rebuild its business with the selection of a sponsor and will make an effort to secure as many funds as possible to repay creditors.
As a result of the petitions, the company said there is a possibility that claims may not be collected.
Akita Elpida has collected ¥700 million of claims for accounts receivable from Elpida each month. However, now that Elpida is set to rebuild under the Corporate Reorganization Act and the collection of accounts receivable has become difficult, the company said the prospect of its future financing has become uncertain.
As a result, Elpida said the subsidiary has also decided to rebuild its business under the Corporate Reorganization Act procedures.
According to the release, Elpida filed its petition as a result of the historic appreciation of yen, the sharp decline in Dynamic Random Access Memory (DRAM) prices because of an intensification of competition in the industry and the sluggish demand for DRAM stemming from a severe flood in Thailand.
Because of Akita Elpida's reorganization proceedings, the parent company said ¥5,731,000,000 of loan receivable claims may not be collected.
The court granted a temporary restraining order in connection with repayments, according to a separate release.
Atsushi Toki has been appointed as the company's supervisor and examiner.
Elpida Memory had ¥448,033,000,000 of debt as of March 31, 2011.
Elpida is a Tokyo-based manufacturer of DRAM integrated circuits.
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