HozNews

BERLIN (AFP) - - Struggling German memory-chip company Qimonda announced Sunday a 325-million-euro rescue package by its parent company Infineon, the regional government, and a Portuguese state bank.

The east German state of Saxony, where Qimonda is one of the biggest employers, will provide 150 millions euros (210 million dollars) to the ailing company.

Infineon will contribute a loan of 75 million euros and a Portuguese state investment bank will give 100 million euros, Qimonda said in a statement.

The company said it also expects to receive a further 280 million euros in loan guarantees from the German federal government and the regional Saxony government.

“The negotiations on the 150 million euro loan (from Saxony state) are already well-advanced,” Qimonda said, adding that it hopes to bolster its research and production facility in Porto, Portugal.

The government in Saxony is expected to grant the 150 million euro loan on Tuesday and has called for Infineon to match its contribution.

But Infineon, which owns 77.5 percent of Qimonda, says it is not financially secure enough to supply more funds.

“We have reached a breakthrough today” necessary to start saving Qimonda, said Saxony’s economy minister Thomas Jurk, who also thanked his Portuguese counterpart for the quick contribution from his country’s state bank.

Earlier this month, Infineon issued a gloomy report for itself and its loss-making memory-chip unit Qimonda, after posting an annual loss of three billion euros (3.8 billion dollars).

Qimonda had been searching desperately for an investor and asked for public aid.