Private equity to buy Infineon wireline business
Struggling German chipmaker Infineon will sell its only profitable business, the wireline communication unit, to a US investor for €250m ($349.5m) in a further step to stabilise its finances.
The sale to an affiliate of Golden Gate Capital is expected to close in autumn 2009 and will significantly improve Infineon’s financial situation, the company said late on Tuesday. The wireline business has been hit by a continued weak market environment and ongoing inventory corrections in the supply chain but had an operating profit of €3m in the first six months of Infineon's fiscal year.
Infineon, floated in 2000, faces refinancing needs of around €770m over the next year and has pledged to come up with a refinancing plan by the summer.
In the past two months, its situation eased somewhat. In May, Infineon generated proceeds of €180m with a convertible bond issue and in June, cost cuts and cash saving measures enabled it to slightly raise its outlook for fiscal third quarter sales growth and group results.
Infineon, which is due to report on its third quarter on 29 July, posted sales of €747m and a net loss from continuing operations of €258m in the quarter ended 31 March. Europe's biggest automotive chip supplier will have four units left after the sale: automotive; wireless solutions; industrial and multimarket; and chip card and security.