**Japan’s JIC Remains Committed to JSR’s Growth Despite Financial Setbacks**
Japan Investment Corporation’s (JIC) private equity division has reaffirmed its commitment to consolidating Japan’s semiconductor industry through its portfolio company, JSR, despite the latter’s recent financial struggles. JIC took JSR private last year in a significant $6 billion transaction, with plans to pursue strategic mergers and acquisitions to enhance the semiconductor sector’s competitiveness. However, JSR reported an operating loss of 209 billion yen for the fiscal year ending in March.
In an interview, JIC Capital CEO Shogo Ikeuchi emphasized that the objective of taking JSR private and facilitating industry reorganizations remains unchanged. “Our goal was to take JSR private and, through a series of industry reorganizations, such as mergers with similar companies or rivals, significantly grow the semiconductor business and enhance international competitiveness, leading to re-listing,” he stated.
JSR has initiated a management overhaul and restructuring efforts, with its new CEO indicating that the company is not yet prepared to pursue acquisitions. The firm’s underperforming life sciences division has negatively impacted its overall earnings, prompting JSR to agree to sell part of this business to Tokuyama Corp for 82 billion yen.
The buyout of JSR by JIC has sparked debate within the industry, with some questioning the necessity and potential effectiveness of such intervention. Ikeuchi acknowledged the challenges of restructuring in Japan, stating, “Japan is a country where restructuring is structurally difficult.”
Established in 2018, JIC aims to invest in companies to bolster Japan’s global competitiveness and operates under the oversight of the trade ministry. JSR has previously indicated a goal to relist within five to seven years, although an earlier listing remains a possibility, according to Ikeuchi, a former executive at staffing firm Recruit.
In February, Hidehito Takahashi, CEO of JSR’s competitor Resonac, expressed interest in collaborating with JSR when JIC eventually exits its investment. Ikeuchi noted that while Resonac is one potential partner, the company’s debt load could complicate matters.
In conclusion, JIC’s strategic vision for JSR and the broader semiconductor industry in Japan continues to evolve, with a focus on overcoming current challenges to achieve long-term growth and competitiveness.
**FAQ**
**What is JIC’s strategy for JSR amid financial losses?**
JIC aims to consolidate the semiconductor sector through JSR by pursuing mergers and acquisitions, despite JSR’s recent financial losses.
