Feeds

Intel cash pays down AMD debt

Good news. For Intel

Security for virtualized datacentres

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. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
Apple SILENCES Bose, YANKS headphones from stores
The, er, Beats go on after noise-cancelling spat
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.