STMicroelectronics, Intel and Francisco Partners close transaction to create Numonyx

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

At the closing, 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 percent equity ownership stake and $155.6 million in long-term subordinated notes. These long-term notes will yield an interest at appropriate market rates.

Intel contributed its NOR assets and certain assets related to PCM resources, while Francisco Partners L.P., a private equity firm, invested $150 million 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 at the closing, Numonyx entered into financing arrangements for a $450 million term loan and a $100 million 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 million.

Effective today, ST will report its investment in Numonyx under the equity method of consolidation, consequently deconsolidating the results of the Flash Memory Group (FMG) from the Company’s operating income line items.

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 approximately $150 million, to be recognized in the first quarter of 2008. Finally, as a direct result of closing this transaction on the last date of the first quarter, ST will now release its 2008 first quarter earnings results on April 29, 2008.

STMicroelectronics