Feeds

Intel cash pays down AMD debt

Good news. For Intel

High performance access to file storage

Less than a week after accepting $1.25bn from Intel in exchange for dropping its legal actions against Chipzilla, AMD has announced how it plans to use that windfall.

In a trio of Wednesday announcements, the world's second-largest microprocessor designer revealed a plan to slash its debt by as much as $1.4 billion, thus protecting itself from an avalanche of liabilities set to hit in 2012.

By doing so, AMD - which continues to hemorrhage cash - hopes to weather a flood of indebtedness that could scuttle its foundering financial situation.

In an effort to right its ship, AMD is offering to buy back up to $1bn in 5.75 per cent "senior notes" due in 2012, redeem all outstanding 7.75 per cent senior notes that are also scheduled to come due in 2012 - which the company reported (PDF) to the Securities and Exchange Commision total $390m - and offer up to $500m in new senior notes to help finance the debt-reduction scheme.

These moves should come as welcome news not only to AMD shareholders, but also to Intel.

As we reported when the settlement was announced last Thursday, AMD's continued existence is Intel's insurance against accusations of a monopoly position that could result in the world's largest processor maker being broken into pieces much as AT&T was in the early 1980s.

Although Intel CEO Paul Otellini said when discussing the $1.25bn payout that "it pains me to write a check at any time," the AMD cash infusion is a boon to both parties. AMD can use the money to retire a chunk of its crippling debt, and Intel can both be assured a marketplace in which it can't be denounced as a monopoly and also avoid the uncertainties of a jury being ask to determine whether it has engaged in anticompetitive practices.

It's a win-win situation - and one that cost Intel only a fraction of its current $12.9bn in cash and marketable securities. ®

High performance access to file storage

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.