AMD to use Intel cash to pay off debt

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
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.


Do NOT follow this link or you will be banned from the site!