Renesas to raise up to $ 2.43 bn

Updated 11 December 2012

Renesas to raise up to $ 2.43 bn

TOKYO: Struggling Japanese chipmaker Renesas Electronics said it would raise up to $ 2.43 billion from a share sale and a separate capital injection to rescue its troubled balance sheet.
The deal would see Renesas sell about 150 billion yen ($ 1.82 billion) worth of shares to the state-linked Innovation Network Corp. of Japan (INCJ) and top corporate names including Toyota and Panasonic.
INCJ is also ready to kick in another 50 billion yen worth of investments or loans as part of a government-backed bailout for the financially-troubled firm.
"The global financial crisis, natural disasters such as last year's earthquake and flooding in Thailand... have been threatening Japan's major industries, manufacturers in particular," Renesas said in a statement announcing the deal.
"We face a situation where our financial condition could rapidly worsen."
Renesas is one of the world's top suppliers of microcontrollers, which function as the brain of automobiles and many electronics products.
But Japan's microchip sector has struggled with a strong yen and fierce competition, especially from South Korean and Taiwanese rivals, with Renesas's tattered balance sheet in desperate need of a cash injection.
"We needed to quickly secure a large sum of money to ensure our future growth," Renesas President Yasushi Akao told a press briefing in Tokyo.
"We are trying to improve our earnings as soon as possible," Akao added.
The firm — created through the mergers of Hitachi, Mitsubishi Electric and NEC Corp.'s chip units — posted a whopping 94.3 billion yen loss in the three months to September owing to huge restructuring costs, and has forecast a full-year net loss of 150 billion yen.
The deal announced Monday was reportedly put together to counter an investment bid from US-based Kohlberg Kravis Roberts, over fears about a key supplier to Japanese industry falling into foreign hands.
The INCJ, which is funded by the government and private sector, will buy about 138 billion yen of the new shares, giving it a two-thirds stake in Renesas, while the group of eight firms will pick up about 12 billion yen in shares combined, Renesas said.
"The company needs a leaner structure to increase its competitiveness," INCJ Chief Executive Kimikazu Noumi told the media briefing.
"It has to achieve a level of efficiency that is on par with its rivals in the global marketplace."
The company's stock closed 3.01 percent higher at 308 yen in Tokyo trade on Monday, with the deal announced after markets closed.
Renesas announced earlier this year it would cut thousands of jobs and reorganise domestic production to concentrate on its mainstay businesses.
Media reports said it planned to step up restructuring by boosting the number of job cuts to 14,000 — or roughly 30 percent of its workforce — and shutting or selling nine domestic plants within three years.
Renesas has said it would boost outsourcing of its chip production to Taiwan Semiconductor Manufacturing Co., including a bigger share of its output of microcontrollers — key components in vehicles and home appliances.
Japan's chip sector has undergone a major shakeup, with US-based Micron Technology in July unveiling a deal to buy bankrupt Japanese rival Elpida Memory for $ 2.5 billion
Elpida, one of the world's top microchip makers, was delisted from the Tokyo Stock Exchange earlier this year in the biggest corporate failure in Japanese manufacturing history.
The troubled firm, which had stayed alive thanks to a government-backed rescue plan, filed for bankruptcy protection in late February.

Labor ministry partners with Al-Nahdi to train Saudis

Updated 26 April 2018

Labor ministry partners with Al-Nahdi to train Saudis

The Makkah region branch of the Ministry of Labor and Social Development (MLSD) has signed a nationalization agreement for the Saudi pharmacies sector with Al-Nahdi Medical Company.

The agreement covers preparing and qualifying young Saudi men and women for the labor market, by providing training programs offered by Al-Nahdi Medical Company at their school, Al-Nahdi Academy.

The signing ceremony was held in the presence of Abdallah bin Ahmed Al-Tawi, director of the Makkah region branch of the Ministry of Labor and Social Development, and Youssef Al-Harthi, who attended on behalf of Al-Nahdi Medical Company’s CEO Yasser Jawhergi.

The agreement comes under Al-Nahdi’s strategy, which is in line with the Saudi Vision 2030. Al-Nahdi aims to expand its community-health services in cooperation with the Ministry of Labor and Social Development. The company said it also aims to activate the role of the private sector in supporting Saudization programs, while creating real and sustainable opportunities for the Saudi youth to play an important role in the cultural and societal progress that the Kingdom is witnessing.

Al-Tawi said the initiative aims to enforce related decisions and programs that empower the Saudi youth to embark on their careers and enhance public-private partnerships.

“Through this agreement with Al-Nahdi company, we also seek the nationalization of the private sector in the different regions of the Kingdom, along with increasing the percentage of the national working force in the labor market by enabling effective partnerships with the private sector,” he said.

Jawahergi highlighted the importance of the agreement in light of the Kingdom’s road to national transformation. “We are committed to creating a sustainable and advantageous work environment for our citizens and society. Our goal is to achieve a real partnership between the public and private sectors, in order to support the Saudi youth of both genders, and create new nationalization opportunities,” he said.

Jawahergi added: “This initiative is considered to be one of the most important initiatives in line with the Saudi Vision 2030, as it establishes an effective and real partnership between the members of our society.”

Al-Nahdi is a Saudi retail pharmacy chain that was founded by Sheikh Abdullah Amer Al-Nahdi in 1986 as a sole proprietorship.