The French government wants to bring new industrial partners along as investors in Franco-Italian semiconductor maker SGS- Thomson Microlectronics NV, which floated on Nasdaq a couple of years ago, Le Monde reported. The French authorities envisage getting additional industrial partners to invest in SGS-Thomson, the report said, adding that industry minister Franck Borotra recently told SGS chairman Pasquale Pistorio of the plan and would discuss it with his Italian counterpart in Rome soon. SGS needs more capital, but a companion aim is to cut the stakes held by two the two major French shareholders, CEA-Industrie and France Telecom, both of which are currently state-owned. Nuclear energy undertaking CEA currently owns 8.75% and France Telecom has 8.65% of SGS, but CEA was intended as a short term financial partner – somewhere to park some of the shares previously held by Thomson-CSF SA, which still has 17.3%, and France Telecom, as it prepares for privatisation, will want to concentrate its investments in core activities. A number of SGS shareholder agreements fall due this year which would, in any case, change its ownership, it said. As part of a 1992 agreement, Thomson-CSF will be free from April 1 to sell its stake in SGS, valued at $1bn or so. If Thomson does not sell in April, CEA and France Telecom could require Thomson to sell its holding to them from October 1. The two companies are expected to sell the shares bought from Thomson in the market, but the addition of new partners would inject fresh capital into SGS, which needs to invest heavily in research and development. In 1995, its research and capital expenditure was $1bn, or a whopping 28% of sales, and a similar amount was invested last year.
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