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Facebook looks for more credit with the banks

Social network wants cash for bumper tax bill after IPO

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Facebook is planning to add a few extra bucks to its $2.5bn credit line to help cover the major tax bill for employee stocks when it goes public.

The social network, which already upped its credit just six months ago, is taking more cash while it can get it, sources told Reuters.

Facebook has said that it will foot the tax bill for its employees' restricted stock units (RSUs) when they vest (become shares) six months after it goes public. Employees are currently holding RSUs, which are basically promises of shares, which will then become shares on the vesting date. The income realised by vesting the RSUs is taxed.

Facebook is going to help cover its staff taxes on the RSUs, a move which is relatively unusual, giving it a hefty tax bill that will likely be billions of dollars.

The social network said in its IPO filing that it could sell more shares to pay the taxes, tap into its credit facility or use its cash.

Facebook set up a line of credit with a number of banks in February last year for $1.5bn, and then upped that to $2.5bn in September.

But the firm is looking pretty darn good at the moment as investors salivate in anticipation of its IPO, which would make it a good time to ask the banks for more cash.

Facebook declined to comment. ®

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