CHIPMAKER Renesas will receive some respite from banks as they relax the terms on emergency loans needed by the firm to stay afloat.
Renesas, which is in dire need of financial help and has been laying off staff and considering shuttering plants, has been looking to banks and the Japanese government backed Innovation Network Corporation (INC) to inject cash. Now the firm reportedly is about to catch a break as Mizuho Financial Group and Mitsubishi Financial Group are set to relax loan terms.
According to Bloomberg's sources the banks might decide this week to extend Renesas' repayment periods and cut interest rates. Reportedly Renesas would be given seven years instead of five to pay back its loans, with interest rates being cut to 1.5 percent from 1.8 percent.
INC is expected to announce some form of investment in Renesas and reportedly is looking at a $2.2bn investment in the firm, which supplies big name device makers including Apple and Nintendo.
Renesas has already started a voluntary retirement plan, is expected to cut its headcount by 5,000 and is shutting down at least eight of its 18 plants. Previously the firm had received a $2.4bn loan from Japanese carmakers, primarily due to its expertise in producing chips used in automobiles. µ