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AMD's Large Debt Mounting Up Fast
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Posted by Donster on: 2007-04-30 14:28:50 1066
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By Tuan Nguyen @ DailyTech
In July of last year, AMD and ATI merged to form one of the largest semiconductor companies. The cost of the acquisition was an enormous burden for AMD: $5.4 billion USD. Analysts at the time said that the acquisition would be a bad move for AMD, noting that the chip company would be better off plunking the large amount of cash in other core businesses like micro processors.
Of the $5.4 billion that it took to purchase ATI, AMD borrowed roughly $2.5 billion in loans and combined with $1.2 biillion common stock. The acquisition not only cost AMD much of its available principle but also left it in heavy debt. At the time, AMD did not disclose plans of how it would pay off the debt. In fact, two months before the confirmed acquisition of ATI, AMD announced that it would be spending $5.8 billion USD into the development of fabs in Dresden, Germany.
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