Renesas gets government bailout

Shareholders of Japan’s troubled electronics maker Renesas have approved an offer you can’t refuse from their government.

According to Reuters, the move sent the chipmaker’s shares more than six percent higher on relief that the $2.4 billion rescue was being finalised.

While the deal had been expected there were fears that something was going wrong after it was delayed.

The bailout will keep the world’s biggest maker of microcontroller chips by market share afloat for the next few years. The company is expected to restructure its loss-making system chip division.

Under the deal, Japan will spend $2.2 billion and take a two-thirds stake in Renesas. Eight manufacturers, including Toyota and Nissan Motor, will provide another chunk of the cash.

Renesas, which has been a big name in providing chips for cars, was formed from the struggling chip divisions of its major shareholding companies Hitachi, Mitsubishi and NEC. Needless to say, piling all that amount of hurt under one roof did make people wonder. Particularly as the company competes with Samsung and Freescale Semiconductor. Things got worse for the company as the chipmarket slowed down with the global economy suffered.

Nikkei claimed Renesas will receive more cash from Hitachi and NEC, adding that Mitsubishi will take a few hundred Renesas employees.