Elpida plans to double share issue

Japanese chipmaker Elpida Memory Inc plans to double to 800 million the number of common shares it can issue, as it grapples with debt repayment deadlines and pressure to deliver a turnaround plan to its creditors, the firm said on Thursday. The move, pending approval at an extraordinary shareholders’ meeting on March 28, comes as the world’s third-largest maker of DRAM chips needs to repay 92 billion yen ($1.15 billion) in bonds and loans over the next two months. Elpida has repeatedly raised funds to keep pace with bigger South Korean rivals Samsung Electronics Co and Hynix Semiconductor Inc, but has been hammered by a slump in prices for its dynamic random-access memory (DRAM) chips. The chipmaker will also ask shareholders to allow it to tap 150 billion yen ($1.87 billion) of its paid-in capital to buy back preferred shares it issued to the Development Bank of Japan. That would cut its paid-in capital by 63.5 per cent to 86.1 billion yen. Lenders and Elpida, a supplier to Apple Inc, need to agree on a turnaround plan by the end of next month. Last week, Elpida flagged doubts over its ability to continue as a going concern since it has been unable to agree on support from banks and the government ahead of the debt repayment deadlines.