AMD desperate for more cash

Posted on Tuesday, Apr 24 2007 @ 10:07 CEST by Thomas De Maesschalck
AMD announced it plans to raise up to $2.2 billion in a debt offering, Forbes reports:
News of the offering comes after AMD posted a stinging first-quarter loss last Thursday of $611 million, or $1.11 per share, down from a profit of $184.5 million, or 38 cents per share, in the year-ago period. Sales sank to $1.23 billion from $1.33 billion.

The loss left AMD with just $1.167 billion in cash, a worryingly low level given its heavy debt load after its acquisition of graphics chip specialist ATI in a $5.4 billion deal last year. The offering may also cool speculation that there could be a private-equity buyout of AMD.

AMD announced it will sell $1.8 billion worth of convertible notes, giving buyers a 30-day option to buy up to an additional $400 million in notes to cover any over-allotments.
Additionally, Standard & Poor's downgraded AMD's credit rating to "B" - this basically means that the extra debt will be more expensive for AMD.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

Loading Comments