Euro Debt Buyback Program Lifts IFX (IFNNY) Shares
Infineon Technologies ADR Ordinary Shares (IFNNY) closed today on the OTC Issues Exchange at $3.49 (up +$0.44, +14.43%) as a result of this news.
On April 1, Infineon ADRs closed at $1.11. They are now up $2.38 (201%) since that date. On the day they were relisted on OTC pink sheets (April 24) thay closed at $2.49 and are up $1.00 (+40%).
>> Infineon 150 Mln Euro Debt Buyback Plan Buoys Shares
Daisy Ku
Reuters (London)
May 5, 2009
Subject 29281
Infineon Technologies (IFX) shares jumped over 13 percent after the German chipmaker said on Tuesday it would cut its debt by buying back up to 150 million euros ($201 million) worth of convertible bonds.
Infineon said it would buy back the convertible bonds and exchangeable notes at a minimum discount of 25 percent to par value.
'It is positive to see management taking advantage of discounted debt valuations,' said Deutsche Bank (DB) analyst Kai Korschelt.
The Munich-based chipmaker, floated in 2000, is suffering from a collapse in the global car market, inventory reductions throughout the electronics supply chain and exposure to its insolvent memory chip unit Qimonda ( QI - news - people ). It has pledged to come up with a refinancing plan by the summer.
At 1550 GMT, Infineon shares were up 13.1 percent to 2.59 euros each. That is about six times 2010 enterprise value to earnings before interest, depreciation and amortisation (EV/EBITDA), compared with four times at peer Micron Technology (MU) and STMicroelecytronics' five times and Samsung's six times.
Infineon's convertible bonds of 700 million euros , maturing on June 5, 2010, convertible at 10.23 euros each, and its Qimonda exchangeable note of 215 million euro, maturing on Aug 31, 2010, at a conversion price of 10.48 a share, are all being traded at deep discount.
Infineon faces refinancing needs of as much as 850 million euros over the next year, according to Deutsche Bank estimates. The company could raise between 400 million euros and 650 million euros via selling its wireless unit, or through a rights issue, Korschelt said. ###
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