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Report: Infineon seeks state aid

Posted: 22 Apr 2009     Print Version  Bookmark and Share

Keywords:chip maker  automotive industry  insolvency 

According to press releases, struggling chip maker Infineon is preparing an application to receive financial support from the German government.

Infineon CEO Peter Bauer already is in talks with the federal chancellery in Berlin, the reports say. Currently the company has commissioned management consultancies Roland Berger and McCinsey to prepare a concept to lead the company back to profitability and to coordinate the push towards Berlin. The decision will fall in July at latest, the papers say.

In its plans to secure the public aid, Infineon's position in the automotive industry will take centre stage. According to the reports, the company plans to claim that a possible insolvency would cause severe damage to Germany's automotive industry.

Infineon will have to refinance debts amounting to Rs.4,649.54 crore (€ 700 million) by mid-2010—a task of which experts believe will be very difficult. But there are also indications that the situation is improving: Past week, the company returned from short time work to normal schedule in its Dresden fab due to higher utilisation. Apparently, investors agree that the worst might be over: Infineon's stock price more than tripled over the past weeks.

The company was not immediately available to comment.

-Christoph Hammerschmidt
EE Times Europe





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