Loss hit AMD renegotiates loan terms

But it's just a precautionary measure, says company

A year ago From The Register, July 1998 -- a year ago In the wake of stinging losses announced earlier this week AMD has renegotiated its credit deal with its banks. On Wednesday the company reported a net loss of $65 million, having been badly hit by R&D spend and poor demand for communications products. According to the company it has met the terms of its loans in previous quarters, and the renegotiation of terms is simply a precautionary measure. The new arrangements say that AMD can't let its ratio of cash to liabilities fall below .8 to 1 from Q3 1998 to Q3 99, and that this ratio be .9 to 1 from the end of 1999. Its minimum net worth can't fall below $1.9 billiom beyond the end of Q3, and it can't suffer net losses greater than $20 million for Q3 1998. If matters don't get better, it might be forced to cut marketing spend, but it will be nervous about reducing R&D. ®

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