AMD says Fujitsu wants payment on closed plant
(Are not AMD and Fujitsu best friends any longer?)
biz.yahoo.com
LOS ANGELES, March 7 (Reuters) - Japanese electronics company Fujitsu Ltd. has asked computer chipmaker Advanced Micro Devices Inc. (NYSE:AMD - news) to pay off a $125 million loan guarantee on a joint venture, but AMD does not believe it is obligated to make the payment, AMD said on Thursday in a filing with regulators.
In an annual report filed with the U.S. Securities and Exchange Commission, AMD said it agreed in 2000 to guarantee the repayment of up to $125 million in Fujitsu obligations after Fujitsu co-signed for its subsidiary Fujitsu Microelectronics (FMI) under that subsidiary's global credit facility.
That repayment guarantee deal was in exchange for FMI agreeing to equip a facility in Oregon to produce flash memory devices for an entity created in 1993 called FASL, an AMD/Fujitsu joint venture.
In November 2001, Fujitsu Ltd. said it would shut the FMI plant in Oregon as part of a cost-cutting program.
AMD said that repayments of borrowings under the credit facility are not due to begin until this month, and that it has received no notice of default on the loan facility.
However, AMD said Fujitsu has asked for the $125 million payment under the terms of the co-signatory agreement.
``Although we disagree with Fujitsu as to the amount, if any, of our obligations under the Guarantee, Fujitsu has indicated its belief that we are obligated to pay the full $125 million,'' AMD said in the filing.
AMD did not elaborate in the filing as to the state of its discussions with Fujitsu or when it expected to resolve the question of what payments, if any, are due.
An AMD spokesman said the company would not comment on the state of discussions with Fujitsu beyond the information in the filing. A Fujitsu spokesman could not immediately be reached for comment.
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