Less than one week after disclosing a $611 million first-quarter loss, chip maker Advanced Micro Devices (AMD) Monday said it hopes to raise up to $2.2 billion through the sale of convertible notes to institutional investors. AMD will offer an initial $1.8 billion in convertible notes and will offer buyers an option to purchase an additional $400 million in notes. The company plans to negotiate the interest rate and other terms of the notes with the purchasers.
At least $500 million from the funds raised through this offering will be used to pay back part of a loan from Morgan Stanley Senior Funding for AMD's acquisition of ATI Technologies. The remainder of the funds will be used for general corporate expenses, including capital expenditures, AMD said. AMD has taken a financial beating in recent months. The company reported a first quarter loss of $611 million -- more than double what analysts expected to see -- on revenue of $1.23 billion. And the outlook for the current quarter is not encouraging: AMD last week predicted its second-quarter revenue will be "flat to slightly up." At the same time, AMD reported its cash position at the end of the first quarter on March 31 was $1.17 billion.
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News source: InfoWorld
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