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Elpida redeems significant bond amid DRAM worries
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According to a report by Reuters, Elpida
Memory, Inc. has announced its intention to redeem all or part of a
$540 million convertible bond it had issued to Nomura Holdings, a major
financial services company. The bond has had a significant effect on
the company’s share price, which plunged by 75% following the
announcement of this bond redemption on Thursday. The ¥50 billion yen
($540 million) raised via the bond in the last month was to be used as
an investment to further shrink the company’s chips.
Elpida had agreed on a condition for the bond, which stipulated that it would pay back the money if Elpida’s share price stayed below ¥509 for 20 consecutive days, which it did. Concern is growing for the DRAM manufacturer, as it now needs to raise funding to remain competitive in the ailing industry.