Feeds

Bondholders: US firm's 'rescue' offer for Elpida is CHEAP

Micron's not paying enough ... see you in court

Choosing a cloud hosting partner with confidence

A group of Elpida Memory bondholders is trying to block the sale of the bankrupt DRAMurai to Micron because they claim the US firm isn't paying enough.

The bondholders, who identify themselves as "multi-billion dollar Japanese and international investment funds", have filed with the Tokyo District Court to try to stop the sale of Elpida to Micron for 200bn yen ($2.5bn, £1.6bn).

"The announced transaction will allow Micron to seize valuable estate assets without paying a fair price for them, to the obvious detriment of all creditors, a great number of whom are domestic," they said in their filing, translated and also filed with a US bankruptcy court.

The bondholders said that the 200bn yen offered was only just over twice Elpida's projected earnings before tax and deductions, which was a "ridiculously low M&A multiple".

The money is to be paid by Micron as 60bn yen ($756m, £486m) upfront and the further 140bn yen ($1.76bn, £1.13bn) in installments, but the bondholders assert that there are so many conditions on the installments, creditors can't be confident they'll ever be made.

The bondholders want to restructure Elpida's debts and inject some more money into the memory-maker so that it can keep going. They say that this would be better for Elpida's creditors and better for its employees – well, apart from senior management.

The filing also urges the court to look into senior management's responsibility for the Micron deal, particularly that of the CEO of the firm at the time it went bust, Yukio Sakamoto.

"The Bondholders have advised the legal trustee on several occasions of their concerns with respect to the potential conflicts of interest of Mr Sakamoto," the filing said. "It would appear… that Micron intends to employ Mr Sakamoto in a high-level capacity after it becomes the owner of Elpida.

"All of Elpida's stakeholders are entitled to know exactly what happens to Mr Sakamoto if the sale to Micron is implemented."

Any deal to work Elpida out of bankruptcy has to be approved by the court, including the Micron sale and the bondholders' alternative. ®

Protecting users from Firesheep and other Sidejacking attacks with SSL

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.