Qimonda insolvency proceedings opened, investor search continues

By Caroline Salls

Pittsburgh, April 1 - The local registry court in Munich, Germany, has opened insolvency proceedings for Qimonda AG and Qimonda Dresden GmbH & Co. OHG, according to a news release.

Michael Jaffe was appointed as insolvency administrator for both companies.

According to the release, Jaffe and his team are continuing discussions with potential interested parties, with the aim to preserve the Qimonda sites and as many jobs as possible in Dresden, Munich and Portugal.

Consultations with political bodies in Bavaria, Saxony, the Federal Republic of Germany, Portugal and the European Union concerning support for a potential continuation of operations are also ongoing.

Qimonda said the prerequisite for this support is the engagement of an anchor investor in a new Qimonda, and a central condition for the continuation of talks with investors was the successful formation of transfer companies for the employees in Dresden and Munich.

About 600 employees in Munich, or about 84% of those employees, and about 1,850 employees in Dresden, or 93% of those employees, accepted an offer made last week to join the transfer company on April 1.

Qimonda said the transfer company guarantees the employees net wages on the basis of compensation for reduced hours, with a supplement of 10% over a maximum period of 4½ months until mid-August.

Since filing for insolvency on Jan. 23, Qimonda said it was possible to continue operations at Munich, Dresden and at a large number of subsidiaries worldwide despite the difficult parameters and the highly complex structure of the international corporate group.

The company said liquidity of both entities in Germany could be ensured and operations could be continued, albeit at a reduced level, during the preliminary insolvency proceedings through strict cost management and the abandonment of loss-making activities.

As a result, Qimonda said it was able to record revenues of more than €90 million during the period of the preliminary insolvency, despite the extremely weak market environment.

Qimonda said mass production of memory chips at Dresden is on hold, beginning April 1, and the equipment will be put into stand-by mode. The company said production could resume if an investor solution materializes.

Although no final decisions have been made about the future structure of the company, Qimonda said its assets would most likely be liquidated if no investors can be found to finance continued operations.

Qimonda is a Munich, Germany-based semiconductor memory products producer.

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