Infineon cuts shares in Qimonda

Infineon Technologies AG announced it will sell American Depositary Shares (ADS) to reduce its equity interest in Qimondaand have a company subsidiary to issue an exchangeable bondwhile Infineon would commit to a share lendingagreement.

On its part, memory product provider has filed a registration statement with the Securities and Exchange Commission and reported that Infineon has submitted an offer to sell 25 million ADSs from its own shareholdings with an additional greenshoe option of up to 3.75 million additional ADSs. Assuming that the sale proceeds as planned, Infineon's interest in Qimonda would be reduced to 78.6 percent. Furthermore, if the greenshoe option is exercised in full, Infineon's interest in Qimonda would be further reduced to 77.5 percent. One ADS represents one ordinary share in Qimonda.

Additionally, Infineon Technologies Investment B.V., a wholly owned subsidiary of Infineon, intends to issue an exchangeable bond plus an additional greenshoe option. During its term, the three-year exchangeable bond will give its holders the right to receive Qimonda ADSs from Infineon in lieu of cash settlement. If all bondholders would exercise their exchange options, Infineon would give, including the greenshoe option, 17 million Qimonda-ADSs for the redemption of the exchangeable bond¡ªequivalent to nearly 5 percent of Qimonda's share capital.

Concurrently with these transactions, Infineon intends to lend an affiliate of U.S. investment bank JP Morgan Securities, up to 10 million Qimonda ADSs alongside its placement of the exchangeable bond.