Business

Renesas shares surge 35% on KKR investment reports

Renesas chips
Image caption Renesas has been looking to restructure its operations amid growing losses

Shares of chipmaker Renesas have surged on reports that US-based private equity fund KKR & Co. plans to invest 100bn yen ($1.3bn; £804m) in the firm.

Renesas shares jumped as much as 35% to 308 yen in Tokyo.

The firm has been struggling amid increased competition from rivals, falling chip prices and weaker global demand.

It reported a net loss of 62.6bn yen for the year to the end of March 2012.

The offer under discussion would give KKR a stake of more than 50% in Renesas, according to the Reuters news agency, which cited sources familiar with the matter.

Analysts said investors were hoping that the fresh injection of funds would help the Japanese firm turn around its fortunes.

Earlier this year, Renesas Electronics, the world's fifth biggest chipmaker, announced a restructuring plan in an effort to streamline its operations.

Under the plan, the firm would close or sell half of its 19 plants and cut 5,000 jobs, or 12% of its workforce.

The company also said that it would focus more on its microcontroller chip business.

Renesas is the world's biggest manufacturer of these chips, which are used in cars, and it has a global market share of more than 25% in the sector.

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