Elpida to get $2.1 bln financial support -Nikkei

TOKYO, June 27 (Reuters) - Japanese PC chip maker Elpida Memory Inc (6665.T) will receive financial support of about 200 billion yen ($2.1 billion) from the government and public and private sector banks, the Nikkei business daily said on Saturday.

Elpida, the world's fourth-biggest DRAM maker, will issue preferred securities worth about 30 billion yen to the state-backed Development Bank of Japan, with the government guaranteeing 80 percent of that amount, the paper said.

A new government body, to be set up in July, will also buy several tens of billions of yen worth of preferred securities issued by the chipmaker, it said.

The government will approve the plan as early as next week, on condition that Elpida cut costs of tens of billions of yen and periodically report to the government on its business conditions.

Elpida competes in a dog-eat-dog market with South Korea's Samsung Electronics Co Ltd (005930.KS) and Hynix Semiconductor Inc (000660.KS) and with U.S. chipmaker Micron Technology Inc (MU.N).

The firm, which faces debt repayments of 127 billion yen in the year to March, has also asked for loans from its creditors including Mitsubishi UFJ Financial Group Inc (8306.T) to help cover those payments, sources close to the matter told Reuters.

The Nikkei said these loans would amount to around 100 billion yen, while state-backed Japan Bank for International Cooperation will also consider supplying emergency loans worth 20 billion yen to 30 billion yen for Elpida's overseas units.

Elpida spokeswoman Kumiko Higuchi declined to comment on the report.

Elpida applied for public aid under a recently revised industrial revitalisation law aimed to help companies hurt by the financial crisis, two sources close to the matter told Reuters.

($1=95.11 Yen) (Reporting by Mayumi Negishi; Editingby Bill Tarrant)