AMD secures $500M credit boost to stave off decline
AMD has secured a much-needed cash injection in order to help the company slow its financial decline.
The Sunnyvale, Calif.-based company said in a statement Tuesday it has secured a half-billion dollar line of finance from a group of lenders, with Bank of America acting as agent.
It comes at a time when the chipmaker remains is struggling amid a decline in PC sales, the company's traditional financial bread and butter, and intense competition from rivals, including Intel and Qualcomm. Now, the company is focusing on game consoles and associated royalties, which at its fiscal third-quarter earnings saw the business unit increase in revenue by 110 percent on the previous quarter, and 96 percent year-over-year.
AMD said the proceeds of the five-year secured revolving line of credit, ending November 2018, which retires may be used for general corporate services, such as working capital needs.
"We have made significant progress during the last year strengthening our capital structure to support our strategic growth plans," according to AMD senior vice president and chief financial officer Devinder Kumar in prepared remarks.
Looking ahead, Kumar said the company expects to end its fiscal fourth quarter with approximately $1.2 billion in cash and equivalents — the same as reported at its third quarter earnings.