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Elpida redeems significant bond amid DRAM worries

11 December 2008 | By Síle Mc Mahon | News > Fab Management

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ElpidaAccording 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.

 

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