AMD tells Wall Street: 'Will dance for cash'
$2.2bn for the poor, please sir
Cash-starved AMD put out its hat on Monday, offering up to $2.2bn in convertible notes to help it raise money.
The chipmaker will proffer $1.8bn worth of Convertible Senior Notes to institutional investors. In addition, AMD expects to bless the buyers with a 30-day option to nab up to $400m of extra notes “to cover over allotments.” AMD just exited the first quarter with $1.2bn in cash – a figure that's $600m more than its “minimal acceptable levels,” according to company executives.
Analysts have been hounding AMD about its cash position in recent months, as the company struggles to deal with a resurgent Intel and internal disorder. AMD's woes resulted in it posting a $600m first quarter loss.
The company plans to use at least $500m of the fresh cash to pay back a portion of the $2.5bn loan used to acquire ATI.
“AMD expects to use any amounts not applied to the repayment of the term loan for general corporate purposes, including working capital and capital expenditures,” the company said in a statement.
While very vague, management last week pledged to cut costs across the company, including pulling back on some Fab work and reducing headcount.
AMD might not have been in this position if it hired CNET editor Michael Kanellos as an adviser. ®