Qimonda Secures Rescue Package

BERLIN -- Troubled memory-chip maker Qimonda AG(QI Quote) on Sunday secured a rescue package of 325 million euros ($452 million) in loans from a German regional government, parent company Infineon(IFX Quote) and a Portuguese state bank.

The Economy Ministry in the German state of Saxony, where Qimonda has a major plant, said in a statement that it achieved a "breakthrough" when Portugal agreed to join the rescue package through its state investment bank. The company has a facility in Porto, Portugal.

Munich-based Qimonda will get a 150 million euro loan from Saxony, a 75 million euro loan from Infineon Technologies AG and a 100 million euro loan from the Portuguese bank, according to the ministry, Qimonda and Infineon.

Qimonda said that it also expects to receive loan guarantees worth 280 million euros from the German federal government and Saxony.

In return for the package, the company said it committed itself to further developing its manufacturing and research facilities in Porto and in Dresden, Saxony's state capital.

Qimonda said earlier this month that it may face bankruptcy if it fails to find new investors. Makers of computer memory chips have been hit hard by falling prices and an oversupply of the products.

Sunday's moves "allow Qimonda to complete its repositioning ... and re-establish its competitive position in the memory industry," as well as invest in new technology, chief executive Kin Wan Loh said.

Infineon spun off Qimonda in 2006 and still holds a 77.5% stake. Saxony initially called on Infineon to contribute 150 million euros to the rescue package, but the parent company said last week it could not provide that much.