September 21, 2007 – Infineon Technologies AG has finalized a proposed reduction in its ownership stake in former memory chipmaking division Qimonda, reducing its stake from about 86% to 78.6% (and maybe down to 77.5% if options are exercised). At a price of $10.92/share, the offering is worth about 194 million euros (US ~$272M).
In parallel, Infineon’s investment subsidiary issued a three-year exchangeable bond of 190M euros ($266.4M), with an exchange price of $14.74/Qimonda ADS, representing a premium of 35%, and in total (18.1M ADS) equivalent to ~5.3% of Qimonda’s share capital.
Last month the German chipmaker announced plans to shave its stake in Qimonda to less than 50% within two years, in order to strengthen both companies and accommodate the interests of shareholders. Most of the German chipmaker’s 1Q07 profit of 120M euros (US ~$155M) came from its stake in Qimonda, which posted a 177M euro (US ~$229M) gain. But showing the volatility of the memory market that spurred the division sell-off in the first place, Infineon saw its losses widen in its most recent quarter (fiscal 3Q07) to 197M euros (US $270M), mainly because of losses at Qimonda (218M euro/$299M).