German chipmaker Infineon plans to raise $1.1bn by floating up to 21 per cent of Qimonda, its memory chip unit, on the New York Stock Exchange by mid-August, making it NYSE’s largest foreign issue since 2004.

Investors are likely to watch the public offer closely as foreign companies have avoided US listings because of stricter corporate reporting standards – and because market turbulence has left its mark on tech-stock prices.

The move marks Infineon’s withdrawal from the cyclical market for D-Ram microchips. It wants to focus on higher-margin logic chips, found in cars or telephones, and will invest some of the IPO takings in this area.

However, the group’s third-quarter figures showed it is still having problems turning in steady profits in its communications and car divisions, while Qimonda made money thanks to a further recovery in memory-chip prices.

In a filing to the US Securities and Exchange Commission, Infineon said it planned to sell up to 63m shares in the form of American Depositary Receipts (ADRs) at between $16 and $18 each, mainly to institutional investors. The Munich-based company had long mulled a listing in Asia, but plumped for New York in May hoping that NYSE-listed rival Micron Technologies would give investors a useful measure. Since then, that stock has lost 15 per cent.

Peter Fischl, Infineon chief financial officer, said the price-building range was, nonetheless, “fair”. Credit Suisse, Citigroup and JP Morgan are bookrunners, with ABN Amro, Deutsche Bank and HVB co-lead managers.

Should the banks manage to sell all allocated shares, Infineon’s stake would shrink to 79 per cent. Wolfgang Ziebart, chief executive, said Infineon would in time give up its majority stake, but refused to specify a timeframe.

Qimonda stands to pocket up to $756m from the offer, although it will have to pay the banks’ fees and repay its parent company a loan of $570m.

The balance is to be invested in research and manufacturing facilities. Infineon plans to pump its takings, which could fall just shy of $350m, into its two remaining divisions.

Together they reported a loss before interest and taxes of €4m ($5.1m) after a loss of €85m a year ago. Sales dipped 4 per cent to €980m.

Get alerts on Credit Suisse Group AG when a new story is published

Copyright The Financial Times Limited 2022. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Comments have not been enabled for this article.

Follow the topics in this article