AMD to use Intel cash to pay off debt
AMD says it plans to reduce its level of debt by $1.4 billion, using a large wedge of the $1.25 billion it received from Intel in exchange for dropping its legal actions against the chip behemoth.
The smaller chip design company has a veritable sword of Damocles hanging over it with a whole slew of financial liabilities - which could finish off the struggling company for good - due to come knocking on the door in 2012.
In a trio of press releases issued yesterday, AMD says it wants to buy back up to $1 billion in 5.75 percent of its 'senior notes' due in 2012 and all outstanding 7.75 percent senior notes due at the same time. The company also plans to offer $500m worth of new senior notes to finance its recovery plan.
$1.25 billion is a relatively small price to pay for cash-rich Intel to cough up in order to keep AMD in business - something it needs badly to avoid being stung with endless accusations of global monopoly should AMD go down the toilet leaving Intel with no effective competition - or 'imitator' in the chip giant's colorful internal parlance.
One hopes that at least some of the cash will be spent by AMD on a really good party, which is perhaps what it had in mind when it wrote the following in one of yesterday's releases:
"Net proceeds not used in the tender offer, if any, will be used for general corporate purposes."
Party on, dudes.