STMicro Signs $450 Million Loan Deal to Support Research Plans
STMicroelectronics NV (STM), which agreed last week to split up it unprofitable ST-Ericsson chip venture with Ericsson AB, signed a loan agreement with the European Investment Bank to strengthen its finances.
The 350 million-euro ($450 million) multicurrency facility, which hasn’t been used, will help fund research and development in technologies and devices, the Geneva-based semiconductor manufacturer said in a statement today. STMicro has an option for disbursement until September next year with final maturity eight years thereafter.
STMicro also said it has repaid 350 million euros of senior bonds. The company said it had a net cash position of $1.19 billion at the end of 2012 and existing credit lines for $490 million.
STMicro and Ericsson said March 18 they plan to wind down their 50-50 chip venture after failing to find a bidder. STMicro will take on the business’s existing products and 950 employees, mainly in France and in Italy, and incur costs of as much as $450 million. Ericsson plans to assume 1,800 of the company’s workers to continue developing its modem technology.
STMicro shares closed 1.6 percent higher at 6.20 euros in Paris yesterday, bringing this year’s gain to 15 percent.
To contact the reporter on this story: Adam Ewing in Stockholm at firstname.lastname@example.org