Elpida Memory begins corporate reorganization, after February bankruptcy filing

The world's third-largest DRAM manufacturer must submit a reorganization plan by August

Japan's Elpida Memory, the world's third-largest maker of DRAM, said Friday it will officially begin reorganization proceedings and submit a final plan by August, amid reports that several large semiconductor makers would bid to offer funds and become partners.

Elpida filed for bankruptcy in February in a Tokyo court, saying it had accumulated debts of ¥448 billion (US$5.4 billion) as of March of last year. The court approved the reorganization plan on Friday, and the company's stock is to be delisted on March 28.

Company President Yukio Sakamoto said in a statement Friday that Elpida would seek to "maintain the company's corporate value and maximize the value of its assets."

The Japanese company has said it will search for outside investors and attempt to turn its business around. The Nikkei, Japan's largest business daily, reported earlier this week that it was in discussions with Micron, long rumored to be a potential partner, and that chip giant Intel was also a candidate.

The Japanese company was unable to recoup large investments it made to boost capacity in 2006 and 2007, as a global oversupply sent prices lower. It was subsequently battered by the global economic downturn, the strong Japanese yen, and flooding in Thailand that led to production halts for many electronics makers.

Elpida, Japan's only major DRAM manufacturer, has had struggles with the volatile chip market before. In 2009, it had similar troubles and secured 110 billion yen in loans from large Japanese banks and a government entity.

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