The Deal
Sunday, November 22, 
2:38 am

Qimonda gets a reprieve

  Share     E-Mail    Discussion    Print Story

qimondachip.jpgContinuing the lifeline theme today (see the previous post about Palm), beleaguered chipmaker Qimonda AG has dodged a bullet with the announcement Sunday that the German state of Saxony, a Portuguese institution and 77.5% shareholder Infineon AG [IFX] offered a combined €350 million ($487 million) in emergency funding.

The agreement had boosted the shares of both Qimonda and Infineon by early afternoon Monday, with the Dresden, Germany-based chipmaker up 76% at €0.42, giving the group a market value of €143.6 million. Shares in its Munich parent were up 7.6% at €0.72, putting a €539.8 million price on the whole company.

Malte Schaumann, an analyst at SES Research GmbH in Hamburg, Germany, wrote that the package removes the short-term threat of insolvency for Qimonda, and will allow it to increase production of its latest "buried worldine" chipmaking technology, giving Qimonda a competitive advantage and potentially attracting bid interest.

At the same time, he wrote, the deal will clear the decks of any bids reliant on buying the company out of bankruptcy and relieve Infineon of any possible litigation or regulatory demands for repayment of subsidies.

The agreement involves a €100 million loan from an unnamed Portuguese bank, €75 million from Infineon and €125 million from the government of Saxony. It follows a Dec. 1 warning from Qimonda that it would face severe liquidity shortfalls in the first quarter of 2009 if discussions with possible investors failed to translate into a deal.

Qimonda said Sunday the agreement would also allow it to draw on a €280 million guarantee from the Federal Republic of Germany and the state of Saxony, and that it was close to securing €150 million of this amount. -- Jonathan Braude

See Dec. 1 post on Qimonda from Tech Confidential

Continue reading below

Also on Dealscape





Post a comment




The Deal Pipeline

Deal Video


Inside The Deal: Avaya Inc.'s Mohamad Ali on the company's next target.


More video...

Crisis On Wall Street
Technology
Deals of The Decade

Community

Industry Insight

Managing your shareholder base

Growth companies and their PE sponsors should be wary of the pitfalls that arise when they layer on tiers of preferred stock.


Industry Insight

Easing the stress of distressed M&A

Corporate buyers face numerous complexities when trying to identify the right moment to purchase a distressed asset.


Editor's Note

Editor's letter: Nov. 16, 2009

Beneath the veneer of Wall Streeters beats the same heart, stirred by the same determinants of behavior.



©Copyright 2008, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.