AMD Just Secured a $500 Million Line of Credit
AMD gets a boost.
AMD has been struggling financially thanks to a slowing PC industry. Today, AMD announced that it had secured a loan of half a billion dollars from a group of lenders. Bank of America is acting as agent for the lenders. This secured revolving line of credit will mature five years from now, on November 12, 2018. Speaking in a statement released today, AMD CFO Devinder Kumar said the loan would offer the financial flexibility AMD needs.
"We have made significant progress during the last year strengthening our capital structure to support our strategic growth plans," said Devinder Kumar, AMD senior vice president and chief financial officer. "We expect to end the fourth quarter of 2013 with cash, cash equivalents and marketable securities, including long-term marketable securities, balances of approximately $1.2 billion and remain committed to maintaining ongoing balances of approximately $1.1 billion, our target optimal level. This secured revolving line of credit provides AMD with greater financial flexibility as we continue transforming AMD for growth across a more diverse set of markets."
AMD has, over the last year, made attempts to reduce investments and capital in non-core parts of the business. The company in March entered into a transaction that saw the company sell and lease back its Austin, Texas campus to Southwest Parkway. That deal was said to generate approximately $164 million in cash for the chip maker. Then, in September, AMD did the same with its Singapore facility. That generated proceeds of up to $46 million (net of all fees).
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I do wish AMD were competitive again, but I have no reason to dislike Intel other than the recent stagnation which, in the long run, really isn't a huge deal.
maybe these are the reasons they need to take out a loan. they could charge what they like for the 290 and 290x, they chose to take a profit hit for market share. that will only pay off if these products don't fail, and with the amount of heat they generate, i hope it doesn't end up leaving a taste of poor quality in consumers mouths. AMD have put out some good products, but i still question quality when they are constantly undercutting competitors prices.
Its good to admire them but you also have to look at it realistically. AMD only releases at price points they can compete at. That's what every company does.
I am sure if the R9-290X was a beast, and by that I mean like what the HD7970 did to the GTX580, then it wouldn't have been priced as moderately.
My laptop has an A8 APU in it. For my 600 dollars, it's worked great for me. Played LOL, and XCom perfectly. Sure, the battery lasts 2 hours, and....well it doesn't last at all anymore after about 8 months of having it, but come on.
I hope they don't end up like Telecom Italia, ie. a company with massive
debts which never makes any money, but cannot die because investors
hang on to the hope things will one day turn around, terrified at the
prospect of a collapse that'd default the debts.
I doubt it's enough to bring out a new competitive desktop CPU.
Ian.