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March 27, 2013

STMicro secures $450m loan from European Investment Bank

Loan will be used to improve R&D

By CBR Staff Writer

STMicro has signed a $450m loan agreement with the European Investment Bank (EIB) to boost research and development as well as strengthen its finances.

The company will use the credit facility to support the design and development of devices which would be deployed in the power, MEMS, microcontrollers, advanced analogue and healthcare industries.

Additionally, STMicro has an option for payment until September 2014 with final maturity eight years thereafter.

The company has also repaid €350m of senior bonds and it had a net cash position of $1.19bn at the end of 2012, with existing credit lines for $490m.

On 18 March STMicro and Ericsson agreed to split their struggling 50-50 mobile chip joint venture, which was formed in 2008, upon failing to find a bidder.

STMicro will take on the existing products and 950 employees based in France and in Italy, while incurring costs of about $450m and Ericsson will assume 1,800 of the company’s employees mostly based in Sweden, Germany, India and China.

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