Infineon plans share issue to raise $1 billion

In order to achieve the Apollo entry, Infineon plans to issue up to 337 million shares at a combined value of €725 million (about $1 billion). The sum is much higher than Infineon's current financial requirements which could have been almost covered by the recent sale of its wireline business. Apollo could take at least 15 percent, possibly up to 30 percent of Infineon's shares.

With the move, Apollo would become Infineon's largest shareholder. Currently the largest shareholder is Dodge & Cox International Stock Fund with holdings of 10.03 percent.

According to Infineon CFO Marco Schröter, the capital increase is part of a three-pronged financial strategy which also embraces the recently announced sale of the company's wireline business and the buy-back of bonds earlier this year.

In return for its investment, Apollo will get to designate the chairman of the supervisory board and obtain a second seat in the board later.

According to a report from the Financial Times Deutschland, the Apollo deal has been enforced by CEO Peter Bauer and outgoing supervisory board chairman Max Kley. However, according to media reports the move encountered resistance within the board.

The move is subject to approval by authorities.

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