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Abu Dhabi sovereign wealth fund Mubadala Development has renegotiated the terms of an agreement made in October to invest in the world's second largest microchip maker after a steep fall in the value of shares in Advanced Micro Devices (AMD), UAE daily The National reported on Tuesday.
The chipmaker, based in Sunnyvale, California, has lost more than half its market value since the deal with the Mubadala-affiliated Advanced Technology Investment Company (ATIC) was announced on Oct 7.
As part of the original agreement, AMD agreed to hive off its manufacturing system into a new business, provisionally named The Foundry Company. ATIC was to receive a 55.6 percent stake in the new venture in return for a $2.1 billion, it said.
But with the value of the AMD assets being contributed to the new company in serious decline, ATIC has negotiated to increase its stake to 66 percent with AMD's stake falling to 34 percent from 44.4 percent.
The paper quoted Khaldoon Al-Mubarak, the Mubadala chief executive, said the Abu Dhabi company was "a patient, long-term investor and continues to believe in AMD's potential and business plan".
In a side agreement to the establishment of The Foundry Company, Mubadala said it would buy a further 11 percent of AMD. The deal will boost its 8.1 per cent holding in AMD, for which it paid $622 million in 2007, to almost 20 percent, The National reported.
ATIC has said it will invest up to $6 billion to expand and diversify the capacity of the new company. Efforts to secure new customers had already begun, the paper quoted Waleed al Mokarrab, the chief operating officer of Mubadala, as saying.
