Faced with a lackluster voter turnout, Advanced Micro Devices announced Tuesday it is extending the deadline for its shareholders to vote on the proposed spin-off of its manufacturing business.
AMD, which in October announced plans to spin off its manufacturing operations, failed to get a quorum of its shareholders to vote on the issue. As a result, the deadline for casting votes has been extended to February 18. A majority of the shares is required to vote to establish a quorum.
The chipmaker reported that as of Tuesday, 42 percent of the eligible shares had been cast. Of this group, 97 percent are in favor of issuing the additional shares and warrants needed to spin off its manufacturing unit.
Under the proposal, AMD would become a chip-designing company and spin its manufacturing operations off to a new entity tentatively called The Foundry Company.
AMD would own 34.2 percent of the new manufacturing company, while the Advanced Technology Investment Co. would own the rest. ATIC is an investment company wholly owned by the government of Abu Dhabi, which is part of the United Arab Emirates.
Abu Dhabi has been invested in AMD since late 2007 when Mubadala Development Co., whose sole shareholder is the Abu Dhabi government, poured $622 million intol the chipmaker.
For AMD, the sooner it can spin off its manufacturing business, the sooner it will be free of the capital-intensive side of its business.The chipmaker unpleasantly surprised Wall Street last month when it reported a $1.4 billion loss in the fourth quarter and a 33 percent year-over-year drop in revenue. The outlook for 2009 is not looking much better.
The company noted that the current macroeconomic conditions provide little visibility into its business and that the continued corrections in its supply chain lead it to believe that first-quarter revenue will fall below that of the fourth quarter.