TOKYO (Reuters) – Bain Capital has proposed an initial public offering (IPO) of Japan’s Kioxia Holdings as part of a plan to allow the money-losing chipmaker to refinance a $5.8 billion loan coming due in June, according to a person familiar with the matter.

Bain and Kioxia met with a group of banks including Sumitomo Mitsui, Mizuho and Mitsubishi UFJ on Monday after the lenders urged Kioxia to come up with a recapitalisation plan because it looks likely to run afoul of the terms of a 900 billion yen ($5.8 billion) syndicated loan, the person said.

Formerly Toshiba Memory, Kioxia was acquired by a Bain-led group in a $18 billion carve-out in 2018. The maker of memory chips is expected to have posted a loss for the year that ended last month, according to the person. That would mark its second straight annual loss and push its net assets below the roughly 500 billion yen required under the terms of the loan, the person said.

Under the plan presented to the banks, Kioxia expects to return to profit in the year to March 2025, seeing earnings of around 130 billion yen.

The person declined to be identified because the information has not been made public. Details of Kioxia’s finances were confirmed in a review of the plan presented to banks by Reuters.

Kioxia, Mizuho and Mitsubishi UFJ declined to comment. Sumitomo Mitsui did not immediately reply to a request for comment. Bain could not immediately be reached for comment.

(Reporting by Miho Uranaka, Additional reporting by Makiko Yamazaki and Maki Shiraki; Editing by Nobuhiro Kubo and David Dolan)

Copyright 2024 Thomson Reuters.

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