Qimonda completes sale of Inotera shares
Qimonda has announced the completion of the sale of its Inotera stake to Micron and the receipt of the second tranche of US$200 million in cash.
In October 2008, Qimonda and Micron signed an agreement whereby Micron agreed to purchase Qimonda's shares in Inotera for US$400 million in cash in two installments. Qimonda received the first tranche of US$200 million for half of its holding in October. The requisite governmental approvals and other customary closing conditions have been fulfilled for the complete sale transaction. Qimonda recorded a one time, non-cash effective book loss of approximately 300 million euros (US$386.78 million) in the fourth quarter of fiscal 2008 in connection with this transaction.
According to the agreement, Qimonda's purchase of Inotera's output capacity is to be ramped down over an eight-month period following the closing. In addition, with the completion of the sale transaction, the development agreement between Qimonda and Nanya Technology regarding the 58nm trench technology has been terminated. Qimonda is currently converting from its 75nm technology directly to its proprietary 65nm Buried Wordline technology and plans to introduce a next generation 46nm Buried Wordline technology mid calendar year 2009.
"The sale of our stake in Inotera is an important component of our restructuring program, providing us with a cash influx to support our restructuring and productivity improvement measures," said Kin Wah Loh, CEO of Qimonda. "In addition, the ramp down of Inotera reduces exposure to the PC market and related cash burn."
In October, Qimonda announced a global restructuring and cost reduction program to reposition the company by concentrating on core strengths in Buried Wordline technology as well as infrastructure and graphics products. Qimonda plans to ramp down manufacturing at its 200mm facility in Richmond, US by January 2009 and its backend component and module manufacturing in Dresden, Germany by end of March 2009. Meanwhile, the company will consolidate its product R&D in Munich and Xian, close its design activities in Raleigh, US by January 2009 and reduce administrative resources and costs to reflect the focused product portfolio and reduced production capacities.