Intel and ST get Numonyx afloat

Narrowly missing the revised deadline set by the companies, Numonyx, the memory spinout from Intel and STMicroelectronics has been formed.

STMicroelectronics is the largest shareholder in the joint venture and has contributed its flash memory assets and businesses, including its phase change memory research and interests in NAND joint ventures. ST now holds a 48.6 per cent equity stake in Numonyx and will receive $155.6m in the form of a long-term loan. The amount is roughly half the originally planned amount.

Intel contributed its NOR-flash assets and some assets related to phase-change memory. Intel now holds 45.1 per cent of the memory company. Private-equity firm Francisco Partners has invested $150m, holding 6.3 per cent of Numonyx in the form of convertible, preferred stock.

For further funding, Numonyx has taken out a $450m term loan and a $100m from banks Intesa Sanpaolo and Unicredit Banca d’Impresa. The loans have a four-year term and Intel and STMicroelectronics have agreed to guarantee half of the loan amount. At close, Numonyx held a cash position of about $585m.

ST said it will no longer report the results of Numonyx in its consolidated results. As a result, and coupled with changes in valuation for comparable flash-memory companies, ST expects to incur an additional one-time non-cash pretax loss of approximately $150m, to be recognised in the first quarter of 2008.

The formation of Numonyx was originally planned for the beginning of the year. But turmoil in the finance markets led Intel and ST to delay the deadline for forming the joint venture to March 28.

Image: Numonyx will focus on the non-volatile memory market, with products going into USB thumb drives and other storage products

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