LONDON — Securities house Nomura International has yet again slashed its estimates for Infineon Technologies for next year and beyond as it fears the German chip maker will face liquidity problems at the end of next year.
Even though Nomura feels refinancing 850 million euros (about $1.2 billion) of maturing notes in 2010 will likely be difficult, "we sense a strong political interest to keep Infineon afloat," noted Gunnar Plagge, semiconductor specialist at the securities house.
Plagge said there is a strong possibility of a highly dilutive refinancing in the medium term, and said he expects net losses for the next three financial years.
He also said he foresees a potential three digit million euros of liabilities arising from a potential insolvency at memories subsidiary Qimonda.
There will likely be imbalances in the product portfolio, and a strong dilution for shareholders seems unavoidable, said Plagge, who has advised investors to switch to Franco-Italian chip maker STMicroelectronics NV.
The revenue estimate for Infineon in 2009 was cut to 3,495 million euros (about $4.8 billion), down 19 percent, and only a small improvement has been pencilled in for 2010.
11%
13%
41%
12%
22%
