Elpida Memory Inc. (6665) closed at 1 yen in Tokyo trading before a delisting that will wipe out shareholders in a company that was valued at more than $1.1 billion before it filed for bankruptcy last month.
The chipmaker, whose customers include Apple Inc. (AAPL:US), will be delisted tomorrow after seeking court protection with 448 billion yen ($5.4 billion) of liabilities last month. Elpida, which went public in November 2004, failed after losses in the past five quarters, exacerbated by falling chip prices and a rising yen, left it unable to repay debt.
The last Japanese maker of dynamic random access memory, or DRAM, chips sought court protection after slowing personal- computer sales cut prices for its products and the strong Japanese currency eroded earnings from overseas. Customers may have to pay more for chips if Elpida is liquidated, as the industry would lose 12 percent of capacity, according to TrendForce Corp., a Taipei-based research company.
“It’s not good for electronics makers,” said Mitsuo Shimizu, a Tokyo-based analyst at Cosmo Securities Co. “The DRAM industry may also become an oligopoly where South Koreans hold pricing power.”
Elpida’s final closing price valued the company at 271.8 million yen, down from a peak of 849 billion yen on Dec. 26, 2006, according to data compiled by Bloomberg.
Elpida’s 0.5 percent convertible bond maturing October 2015 was at 15.5 yen per 100 face value as of 1:26 p.m. in Tokyo, according to prices from Citigroup Inc. The bonds plunged from 58 on Feb. 27.
The chipmaker said March 23 it got court approval for President Yukio Sakamoto to lead its revival. The company plans to submit a restructuring plan by Aug. 21 after selecting a sponsor, it said.
Elpida’s market share in the fourth quarter trailed Suwon, South Korea-based Samsung Electronics Co. (005930); Icheon, South Korea- based Hynix Semiconductor Inc. (000660); and Boise, Idaho-based Micron Technology Inc. (MU:US), according to TrendForce.
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