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Financing cut for flash-memory venture from Intel and allies

Intel, STMicroelectronics postpone the establishment of Numonyx, a flash memory supplier, and the joint venture's debt financing is cut by about half.

Financing has been cut by about half for a partnership by Intel, ST Microelectronics, and Francisco Partners to launch a flash memory company called Numonyx, the companies said Wednesday. In addition, the company, called Numonyx, won't be established until early 2008, under a revised schedule.

Initially, Numonyx was to have received up to $1.55 billion in debt financing. The companies have revised financing terms so Numonyx now has a $650 million loan and $100 million revolving credit facility, Intel said in a regulatory filing with the Securities and Exchange Commission.

STMicroelectronics added in a statement that the companies obtained the new financing after "significant turmoil in the debt capital markets."

The companies had a December 22 deadline to establish Numonyx but have agreed to an extension to March 28, the companies said.

The partners still intend for Numonyx to "hit the ground running" with patents, a independent work force, and well-equipped manufacturing facilities, STMicroelectronics said. "Based on the finalized financing structure, at closing Numonyx is expected to have a similar level of net cash, with lower indebtedness, than originally anticipated," the company added.

Flash memory endows everything from portable media players to high-end laptop computers with data storage space, and its use is on the rise as more devices either have it built in or come with slots that accommodate plug-in flash cards.