TOKYO, April 16 (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.

It was not immediately clear if the banks had accepted the

proposal. The timing of the proposed listing was also not clear,

though the person said it would come after the June refinancing.

Kioxia would also need to present a convincing growth plan

to future investors, the person said.

Kioxia, which been hammered by a slump in the market for

memory chips, remains a prominent chipmaker even as Japan has

ceded influence in the sector to Taiwan and South Korea.

The Japanese government aims to revive the country's lost

position as a major chipmaking centre and is extending subsidies

to Kioxia and other companies.

There are also been some signs of a pick-up in demand for

the memory market.

The banks want the refinancing to pave the way for reviving

merger talks with U.S. chipmaker Western Digital ( WDC ),

according to the source.

Talks between the two to merge and create a memory chip

powerhouse stalled last year due to opposition from South

Korea's SK Hynix, which is an investor in Kioxia.

The banks had previously pledged to provide a loan of about

1.9 trillion yen on the condition that Kioxia would merge with

Western Digital ( WDC ).

($1 = 154.5300 yen)