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Sat, Jul 11, 2009 - Page 10 News List

Apollo to support Infineon with nearly 30 percent share


The troubled German computer chip maker Infineon said yesterday it would make a major capital increase with the backing of the US investment fund Apollo.

Infineon said it would issue new shares worth a total of 725 million euros (US$1 billion) and that current shareholders would be given a place at the head of the line to buy them.

The plan calls for the issuance of 337 million new shares at 2.15 euros per share, a statement said.

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

The move confirmed a press report earlier yesterday in the Financial Times Deutschland.

The operation would be one of the biggest in a German company in several months, the newspaper 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.

Infineon 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 fiscal year, it posted a net loss of 662 million euros on sales of 1.6 billion, the paper said.

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