The credit crunch has forced Intel and STMicroelectronics to delay the merger of their unprofitable memory chip businesses as new financing arrangements are worked out, the Financial Times reported on Thursday.Under the deal, announced last May, lenders were to provide $1.55 billion in debt financing for the new company, Numonyx.But in separate statements issued last Wednesday, Intel and STM said they had been renegotiating terms with lenders.Revised financing will provide less than half the original total, with a senior loan of $650 million and $100 million in a revolving credit facility.“The financing terms will result in certain changes in certain changes in the terms of the master agreement, which are being negotiated by the parties,” Intel said.In the meantime, the FT reported there had been an agreement to extend the termination date for the merger from 31 December to 28 March 2008.“We are in the process of renegotiating credit agreements, and clearly (the amount) will be less,” Intel said. “The markets have changed significantly since we first announced the deal.”Intel had been looking to sell or spin off its unprofitable NOR Flash memory business for some time, FT said.The deal between the number one chipmaker and Europe's largest combines Intel's NOR Flash with STM's Flash businesses.The technologies provide storage chips for digital cameras, mobile phones and other devices.The merger would create a company with $3.6 billion in annual sales, putting it ahead of Spansion.Intel has been focusing on its core microprocessor business and disposing of other assets. Its own NAND flash manufacturing capacity has been merged into a joint venture with the chipmaker Micron, while research and development for its memory chips remains in-house.STM will hold a 48.6 per cent stake in Numonyx and Intel's stake will be 45.1 per cent.Francisco Partners, a Silicon Valley buy-out fund, is investing $150 million for a 6.4 per cent stake.
http://www.independent.com.mt/news.asp?newsitemid=62616
