Infineon to sell shares to raise investment cash, pay off debt
To Infineon and beyond
German chipmaker Infineon has laid plans to sell shares in the US in order to fund investments during a time of deeply declining DRAM prices.
Infineon has filed a registration statement with the Securities and Exchange Commission (SEC) to allow it to conduct a public offering in the US.
The amount of shares to be sold and timing of the issue has not yet been set, but the firm has the authority to issue up to 60 million shares. It has hired Goldman Sachs to manage the sale. Shares in Infineon feel slightly to $35.5 last night on news of the offer.
Infineon spokeswoman Katja Schlendorf told Bloomberg that the offer would be used "to raise cash for future investments, potential acquisitions or the repayment of short-term debt".
Prices of DRAM chips have fallen to around $2 against the $3.40 it costs Infineon to manufacture them. Against this background, Infineon is moving into the production of smart cards and chips for the telecoms market but DRAM still makes up the majority of its sales.
A share offer would help finance this move and also further its goal of diluting the influence of majority shareholder Siemens on its business.
As previously reported, Infineon chief executive Ulrich Schumacher said Siemens should cut its stake in Infineon from its current 56 per cent to just 10-15 per cent. Siemens too wants to reduce its stake in its former chip division but it's unclear if it wants to go as fast as Schumacher is suggesting.
Last month Infineon won the patent infringement lawsuit filed against it by Rambus but it is due to receive only ten per cent of the punitive damages awarded to it by the jury in the case, just $350,000. ®
Infineon sees sun through DRAM clouds
Infineon boss seeks fuller break from Siemens
Infineon damages slashed
Infineon lets Rambus retain SDRAM patents
Infineon to start churning out 300mm wafers in second half