STMicroelectronics signs European loan agreement
STMicroelectronics has signed a loan agreement for 350 million euros ($450m) with the European Investment Bank.
The French chipmaker announced the loan today, and the funds are aimed at improving research and development as well as strengthen the firm's finances. Signed with the European Investment Bank (EIB), the funds have not yet been used, but will "strengthen the long-established relationship between ST and EIB," according to a statement.
The credit facility will also be used to support the design and development of devices for applications in the power, MEMS, microcontrollers, advanced analog and healthcare industries.
STMicro has an option for disbursement until September 2014 with final maturity eight years thereafter.
The firm also said that it has repaid senior bonds worth 350 million euros, and STMicro had a net cash position of $1.19 billion at the end of last year. Existing credit lines are worth $490 million.
After failing to find a buyer, STMicro and Ericsson announced this month that their joint venture, ST-Ericsson, would be wound down and split between the two companies on a 50-50 basis. Ericsson will take on the development of LTE products, whereas STMicro will assume existing products relating to the JV except anything related to LTE modems.
Ericsson plans to secure 1,800 employees and contractors from Sweden, Germany, India and China, and STMicro will assume 950 members of staff in France and Italy to work on ST-related products.