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German State Considers Stake In Qimonda

State of Saxony is mulling a 25 percent stake in bankrupt computer chipmaker Quimonda AG in order to have a voice in future company decisions.

FRANKFURT (AP) -- The German state of Saxony isn't ruling out taking up an indirect stake in bankrupt computer chipmaker Qimonda AG anymore, the state's governor said Thursday.

Stanislaw Tillich said his state government could consider a 25 percent stake in order to have a voice in future company decisions. He said, however, that the majority investment to support the company must come from a private investor, to which the state could also provide financial help.

He said Saxony would do everything to ensure Qimonda's "roof is waterproof," but that an outside investor with a viable business plan was the most essential for Qimonda.

Inspur, a Chinese state company, was last rumored to be a possible investor for just less than half of Qimonda, while the remainder of new financing would have to come from other investors, Saxony and the Portuguese government.

Qimonda's main operations are in Dresden, while it also operates in Portugal. Portugal has indicated it's ready to provide further support to the company.

Qimonda scrambled for months to secure more public and private financing as falling demand compounded the fallout from an ongoing glut of a type of memory chip it produces, the dynamic random access memory, or DRAM.

In January, Qimonda said a euro422 million ($570 million) loan package from Saxony, Infineon AG and a Portuguese bank wasn't enough to avert bankruptcy and wide-scale restructuring.

Neubiberg-based Infineon holds a 77.5 percent stake in Qimonda.

Qimonda recently said it would close a plant it operates in Richmond, Virginia, cutting about 1,500 employees. The company is also reducing its payroll in Germany.

Shares of parent Infineon were up 11 percent at euro0.69 in late Frankfurt trading.

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