Bloomberg News

Elpida Bidder, Eircom, MF Global U.K. Cash: Bankruptcy

March 30, 2012

Hynix Semiconductor Inc. (000660), the world’s second-largest maker of computer memory chips, submitted an initial proposal to bid for Elpida Memory Inc. (6665), the Japanese chipmaker that filed for bankruptcy last month.

The South Korean company will decide whether to make a final bid after due diligence, it said in a regulatory filing today. Toshiba Corp. (6502) also was considering a bid, a senior executive for the Tokyo-based company said today, asking not to be identified because the discussions are private.

Bidders for Elpida’s assets may gain as much as 12 percent of the global market for dynamic random access memory, or DRAM, chips as the Tokyo-based company tries to revive itself after filing for bankruptcy with liabilities of 448 billion yen ($5.5 billion) on Feb. 27. Hynix is trying to narrow the gap with industry leader Samsung Electronics Co. and fend off Micron Technology Inc. (MU:US) as chip prices are damped by slowing PC sales.

“Participating in the initial stage of bidding was a must for Hynix because their competitors are known to be bidding,” said Song Myung Sup, a Seoul-based analyst at HI Investment & Securities Co. “They need to be part of the process to assess Elpida’s situation more clearly. Also, you need to go in there to have a better idea what competitors are looking for.”

Falling chip prices and a stronger yen eroded Elpida’s earnings, exacerbating the Tokyo-based company’s troubles after it received financial support from the government and lenders in 2009. The chipmaker, whose customers include Apple Inc. (AAPL:US), was delisted from the Tokyo Stock Exchange on March 28.

Eircom Gets Creditor Protection After Losing ‘Pass-the-Parcel’

Eircom, the Irish phone company, was placed in interim examinership today by a Dublin court, in the country’s biggest creditor-protection ruling, as the company seeks to restructure its debt.

The ruling for examinership, an Irish variant of U.S. Chapter 11 bankruptcy protection, of Eircom was made in the High Court after a petition by the company yesterday. Judge Peter Kelly said Michael McAteer will be appointed as an interim examiner pending a full hearing on April 18.

Eircom was the subject of a game of “corporate pass-the- parcel,” Kelly said. In this case “the parcel lost,” he said, referring to the debt taken on by the company during the changes of ownership since it was privatized.

Banks Hold $1 Billion in MF Global U.K. Cash, KPMG Says

About $1 billion of MF Global Holding Ltd. (MFGLQ:US) U.K. clients’ money remains locked away in other financial institutions five months after the brokerage’s collapse, administrators KPMG LLP said.

KPMG has collected more than $500 million from those accounts to date, the firm said in an update published on its website. The figures relate to unsegregated client accounts, which MF Global was allowed to mix with its own funds and which have proved difficult for the administrators to recover.

KPMG said it was taking action to obtain the $1 billion of unsegregated assets from a “small number of financial institutions” that it didn’t identify. The firm threatened to sue banks that don’t hand over funds, it said at a London creditors meeting in January.

KPMG, appointed to wind up the London-based unit when the New York-based parent filed for bankruptcy in October, plans to produce statements setting out the account positions of 75 percent of customers by March 30. MF Global was the fifth- largest financial company to file for bankruptcy when it sought protection on Oct. 31 after getting margin calls on its bets on European sovereign debt.

Tepco Requests $12 Billion of Public Funds to Avert Insolvency

Tokyo Electric Power Co. (9501) requested 1 trillion yen of public funds to avert collapse, paving the way for the government to take control of what once was the world’s biggest private utility.

The company known as Tepco also asked for 845.9 billion yen in extra aid from a government-backed fund to compensate people affected by the Fukushima disaster, President Toshio Nishizawa said at a news briefing yesterday. The utility may face insolvency if its capital keeps falling, he said.

The government is preparing a Tepco bailout package of as much as 11 trillion yen, the largest in Japan since the rescue of the banking industry in the 1990s, after last year’s quake and tsunami crippled the Fukushima Dai-Ichi nuclear station and forced about 160,000 people to flee their homes. The capital injection, if approved by the government, would effectively nationalize Tepco and lead to a possible reform of Japan’s electricity industry, now monopolized by regional utilities.

“Tepco would become the touchstone of the government’s liberalization of the industry,” Yuji Nishiyama, a Tokyo-based analyst at Credit Suisse Group AG (CSGN), said. “If the government seriously wants to reform the power industry, it needs to hold two-thirds of Tepco’s voting rights.”

Bailout funds for Tepco will be funneled through the government’s Nuclear Damage Liability Facilitation Fund. Kazuhiko Shimokobe, head of the steering committee of the fund, told reporters that the government hasn’t decided on how much voting rights it will take in Tepco.

Sanko Steamship Receives Approval to Defer Debt Repayments

Sanko Steamship Co. received approval to defer debt repayments after meeting with creditors yesterday, according to a faxed statement from the shipping company.

Sanko Steamship will suspend repayment of debt until it meets with creditors on July 3 for approval of its restructuring plan, the statement said. The company got permission for an out- of-court reorganization earlier this month.

Petroplus Has Been Given Six Months For Bankruptcy Proceedings

Petroplus Holdings AG said on March 28 it has been granted ordinary composition proceedings until September 27 by the Cantonal Court of Zug. The company also said it applied for the delisting of its shares. The last trading day will be May 11, the company said.

Potential buyers for Petroplus Holdings AG’s Coryton (BPCOCRUD) oil refinery in the U.K. will visit the site in the coming weeks, according to a local member of the European Parliament.

“There are a number of interested parties,” said Richard Howitt, a member of European parliament for the east of England. “We need to advance the bids.”

Administrators have been working to secure the future of Petroplus’s five European refineries after the company filed for insolvency in January. Crude supply has been secured for Coryton and the Petit-Couronne plant in France under so-called tolling arrangements. Gunvor Group Ltd., an energy trader, agreed to buy the Antwerp (BEANCRUD) plant in Belgium this month.

Pfleiderer Holding Company Files Application for Insolvency

Pfleiderer AG (PFD4)’S holding company filed request to open insolvency proceedings, asks to act as debtor in possession. Attorney Horst Piepenburg was appointed temporary custodian, the company said March 28. The request applies only to Pfleiderer’s holding company, subsidiaries aren’t affected by the insolvency, the company said.

-- With assistance by Jun Yang in Seoul, Go Onomitsu, Naoko Fujimura, Tsuyoshi Inajima and Yuji Okada in Tokyo, Louisa Fahy in Washington, Dara Doyle in Dublin, Kit Chellel and Nidaa Bakhsh in London. Editor: Christopher Scinta

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.


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