* NEC: shareholders will not agree to Renesas cash support -
* NEC exec: Not yet decided on whether to provide loan
guarantee to Renesas
* Renesas plans to cut employee pay by 7.5 pct - sources
(Adds detail, background)
TOKYO, June 9 Japan's NEC Corp will not
provide a fresh capital injection to support loss-making
chipmaker Renesas Electronics Corp, a senior NEC
executive said in a newspaper interview.
NEC's vice president Takashi Niino said his company rejected
the request partly because all electronics makers were facing a
difficult operating environment and NEC's shareholders would not
agree to a cash infusion, Niino said in an interview with the
Asahi newspaper published on Saturday.
Renesas, a product of successive mergers of the chip
divisions of Mitsubishi Electric Corp, Hitachi Ltd
and NEC, has been trying to raise more than 100 billion
yen ($1.26 billion) in fresh capital and plans to cut at least
12,000 jobs, sources have said.
Niino said NEC cannot take on any laid-off workers from the
chipmaker as the electronics maker was in the midst of its own
restructuring process and plans to cut 10,000 employees from its
"If we were to take on the workers, the current situation
facing the company (NEC) could worsen," Niino said.
NEC, which along with its employee pension fund holds a 35
percent stake in Renesas, has struggled with steep losses in its
mobile handset and IT hardware businesses. The company logged a
net loss of 110.3 billion yen ($1.4 billion) for the business
year that ended on March 31.
NEC has not yet made any decision on whether to provide loan
guarantees instead to support Renesas, Niino said.
Japanese media reported on Friday that Renesas was asking
its major shareholders for loan guarantees after they balked at
a plan to inject fresh capital.
Renesas, the world's leading supplier of microcontroller
chips used in cars, is battling high costs and tough overseas
competitors. It logged a massive net loss this year after it was
forced to shut eight of its factories because of natural
disasters last year in Japan and Thailand.
In addition to the sweeping restructuring plan, Renesas also
plans to cut employees' pay by 7.5 percent for the nine months
ending March, 2013, sources familiar with the matter told
Reuters on Saturday.
Renesas employees would also be asked to forgo their winter
bonuses this year, sources said.
The sources said the plan would cut costs by more than 30
billion yen annually and shore up the firm's finances and was
presented to the company's labour unions on Friday.
($1 = 79.6150 yen)
(Reporting by Maki Shiraki and Mari Saito; Writing by Stanley
White; Editing by Robert Birsel)