Elpida Plunges by Daily Limit in Tokyo

Elpida Memory Inc. (6665), the Japanese chipmaker facing an April deadline to repay debts, plunged by the daily limit in Tokyo before trading was halted as offers to sell exceeded buyers.

The shares dropped 21 percent, the biggest decline since 2004, to 294 yen as of 9:54 a.m. in Tokyo before trading was suspended on the imbalance of orders. The chipmaker was offered at 294 yen as of 10:10 a.m. on the Tokyo Stock Exchange.

Elpida said yesterday there is “uncertainty” about its future as it hasn’t reached a deal with the trade ministry, the Development Bank of Japan and its main lenders, reversing a Feb. 2 statement that it expects to secure financing. The Tokyo-based company’s ability to repay 92 billion yen ($1.2 billion) in bonds and loans is made more difficult by plunging chip prices and five straight quarters of losses.

“The chip industry is in trouble,” said Edwin Merner, president of Tokyo-based Atlantis Investment Research, which manages $300 million. “Most commodity type chip companies are losing money and the business continues to be capital intensive.”

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Dave McCombs at dmccombs@bloomberg.net

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