14 DAY TRIAL // Advanced Micro Devices finally has the means to stabilize its foothold in the IT industry by reducing its debts and making certain investments meant to improve its overall budget. It seems that the CPU maker is in quite a rush to settle its most dire financial difficulties, seeing how it won't be wasting any time before spending most of the $1.25 billion it received through the antitrust settlement between it and Intel Corp.
AMD seems relieved to have settled this antitrust lawsuit this year, as its cross-license for manufacturing x86 processors would have expired in 2010. Coupled with the fact that it had debts due to be paid in 2012, debts worth about two billion dollars, the company could not risk initiating another lawsuit with Intel.
If it had begun to litigate over the x86 license, the case, despite the fact that it would have probably ended in its favor, would have settled too late for the $3.5-4 billion compensation from Intel to aid in the debt's repayment. Not only that, but Advanced Micro Devices would have had to spend an additional $1.5-$2 billion for manufacturing CPUs without a license during 2011 and 2012 (Bright Side of News says).
The company will use the $1.25-billion victory money to cut its total outstanding debts by $890 million. In addition, $390 million will be used to pay off the 7.75% yield debt, which was due for payment in 2012. Debt repaying isn't the only thing on the CPU manufacturer's agenda, though. Plans have been set in motion to spend about $500 million in senior notes, which are expected to be later redeemed for double the amount. If successfully carried out, AMD's total outstanding debts will be reduced to a significantly more manageable $485 million.
AMD is glad to finally be getting out of the insecure situation it has been in for the past 18 months. With the total debts being under $500 million, AMD will probably start making profit again, even before completely settling its financial problems.