Ailing Chip maker Infineon queues up with many companies currently asking for state aid. According to Financial Times Deutschland, the company has applied for a guarantee worth €500 million (about $693 million).

With its statement, the paper refers to sources near the company.

Infineon was not available to comment.

Currently, there is an extensive public discussion which companies and industries are 'system-relevant'. This criterion is, according to the government's official argumentation, a decisive factor to receive state aid. Infineon claims it is system-relevant since it has a key role for several industries which in turn are very important for Germany's export-oriented economy. As recently as past weekend, Infineon supervisory board chairman Max Kley had claimed this criterion for the company in an interview with conservative German paper Die Welt. Kley is said to have good contacts to politics and the banking industry.

Another criterion for such a guarantee is that the company's business has been affected by the financial crisis in the first place. In order to meet the criterion, the company has to explain its financial situation before July 1, 2008. Since Infineon already at that time wrote red figures, it could be difficult to argue that it was not mismanagement but the effects of the crisis that loaded the company's financial situation.

Infineon argues that the automotive crisis as a consequence of the financial crisis was the major contributor to the current problems.

A deadline for the government's decision is unclear, the paper wrote.

Infineon is in the difficult situation to refinance debts to almost € 600 million million) by mid-2010. Recently, the company bought back older debts at a relatively low price and issued a bond, Both measures however will not suffice to close the financial gap for the company.

By: DocMemory
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