Elpida Bondholders Form Group to Demand Reorganization Details

Elpida Memory Inc. bondholders formed a group to demand more information from the bankrupt company’s trustees on its reorganization, according to a law firm advising the investors.

The bondholders are concerned about whether the sale would be conducted “in a robust and transparent manner in consultation with creditors,” Bingham McCutchen LLP said in a statement. The investors have combined holdings of about 40 billion yen ($492 million) of debt, Mark Fucci, a Hong Kong-based lawyer at the firm, said today by phone. That’s equivalent to about 29 percent of Elpida’s outstanding bonds, data compiled by Bloomberg show.

Elpida, whose clients include Apple Inc., filed for bankruptcy in February with liabilities of 448 billion yen after losing money for five quarters because of falling chip prices and a stronger yen. Company President Yukio Sakamoto is heading the restructuring after getting court approval last month to serve as a trustee alongside Nobuaki Kobayashi, a lawyer who aided Elpida in its filing.

A spokesman at Elpida trustees’ office, who declined to be identified, citing the firm’s policy, declined to comment.

The group plans to negotiate with Elpida’s trustees to reach agreement on a reorganization plan, according to the statement. The group includes 13 investors and the number is increasing, Fucci said. He declined to provide information on the group’s next course of action.

SK Hynix Inc., the world’s second-largest memory-chip maker, said March 30 that it submitted a proposal to bid for Elpida. Private-equity firm TPG Capital also plans to bid, a person familiar with the matter said this month. Toshiba Corp. may join Hynix, and Micron Technology Inc. may try to buy Elpida’s assets, Japanese media including the Nikkei newspaper have reported.

Elpida has six bonds whose redemption dates range from March 2012 to August 2016, with a total face value of about 139 billion yen, according to data compiled by Bloomberg.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE