ST, Intel, Francisco Partners create Numonyx

STMicroelectronics of Switzerland, together with Intel and Francisco Partners announced the closing of their previously announced Numonyx joint venture.

STMicroelectronics contributed its flash memory assets and businesses in NOR and NAND, including its Phase Change Memory (PCM) resources and NAND joint venture interest, to Numonyx in exchange for a 48.6% equity ownership stake and $155.6 mln in long-term subordinated notes.

Intel contributed its NOR assets and certain assets related to PCM resources, while Francisco Partners L.P., a private equity firm, invested $150 mln in cash. Intel and Francisco Partners equity ownership interests in Numonyx are 45.1% in common shares and 6.3% in convertible preferred stock, respectively.

Also, Numonyx entered into financing arrangements for a $450 mln term loan and a $100 mln committed revolving credit facility from Intesa Sanpaolo S.p.A. and Unicredit Banca d’Impresa S.p.A. The loans have a four-year term and Intel and STMicroelectronics have each granted in favor of Numonyx a 50% guarantee not joint and several, for indebtedness.

At close, Numonyx has a cash position of about $585 mln.

As a consequence of the final terms and balance sheet at the closing date, coupled with changes in valuation for comparable Flash memory companies, ST expects to incur an additional one-time non-cash pretax loss of $150 mln, to be recognized in the first quarter of 2008.

STMicroelectronics is a global leader in developing and delivering semiconductor solutions across the spectrum of microelectronics applications. An unrivalled combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP) portfolio and strategic partners positions the company at the forefront of System-on-Chip (SoC) technology and its products play a key role in enabling today’s convergence markets.