German chipmaker Infineon unveils major capital increase

July 10, 2009
Computer chip maker Infineon said it would make a big capital increase guaranteed by the US investment fund Apollo, giving the troubled German company a breath of fresh air.

Computer chip maker Infineon said on Friday it would make a big capital increase guaranteed by the US investment fund Apollo, giving the troubled German company a breath of fresh air.

Infineon said it would issue new shares worth a total 725 million euros (one billion dollars), and that current shareholders would be given a place at the head of the line to buy them.

The money will be used to repay about 570 million euros in convertible bonds which mature in mid 2010, a statement said.

Infineon's plan calls for the issuance of 337 million new shares at 2.15 euros per share, it added.

Apollo has pledged to buy shares not taken by current shareholders up to a total of 326 million, which would represent a stake of 30 percent minus one share in the German company.

That would make it the dominant Infineon shareholder, ahead of the US funds Dodge and Cox International, each of which own around 10 percent and will have priority during the capital increase.

The news boosted Infineon shares, which gained 1.94 percent to 2.63 euros in midday Frankfurt trading, while the TecDAX index on which they are listed was 0.60 percent lower overall.

Infineon shares leapt higher earlier this week when the group said it would sell fixedline telephone and Internet operations to the US private-equity firm Golden Gate Capital for 250 million euros.

The capital increase would be one of the biggest in a German company in several months, the Financial Times Deutschland said, and represents a change for Apollo, which normally acts like a hedge fund that buys an ailing company to either restructure it, sell off valuable parts, or merge it with another firm at a profit.

has suffered from a collapse of the automobile electronics component sector and is already in the process of restructuring its activities.

In the first half of its 2008/2009 fiscal year, it posted a net loss of 662 million euros on sales of 1.6 billion.

(c) 2009 AFP

Explore further: Deutsche Telekom welcomes Blackstone stake

Related Stories

'Collapse' in semiconductor demand hits ASML

April 15, 2009

Dutch computer chip equipment maker ASML on Wednesday announced net losses for the first quarter after a collapse in sales, but said it saw signs of improving market conditions.

Recommended for you

Internet giants race to faster mobile news apps

October 4, 2015

US tech giants are turning to the news in their competition for mobile users, developing new, faster ways to deliver content, but the benefits for struggling media outlets remain unclear.

Radio frequency 'harvesting' tech unveiled in UK

September 30, 2015

An energy harvesting technology that its developers say will be able to turn ambient radio frequency waves into usable electricity to charge low power devices was unveiled in London on Wednesday.

Professors say US has fallen behind on offshore wind power

September 29, 2015

University of Delaware faculty from the College of Earth, Ocean, and Environment (CEOE), the College of Engineering and the Alfred Lerner School of Business and Economics say that the U.S. has fallen behind in offshore wind ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.