Microsoft May Need to Borrow Some Cash

February 5, 2008

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If history is taken into account then Microsoft has been known to have a huge reservoir of funds which prevent it from loaning for any deal, but this time it appears that the bid of US $44.6 Billion has forced it to consider such an option.

This was made known by the company's CFO Chris Liddell in a briefing to Wall Street analysts.

This would be the first time in the company's history that the cash part of the half-cash, half-stock offer at $31 per share would be fulfilled through a borrowing.

Further, that Microsoft is considering a loan underscores the magnanimity of the bid and that the company is even willing to take that risk. It seems to have good reasons to take the risk as it has been reporting over US$5.8 billion in net cash from operations in the previous quarter itself. But, the question of exactly how much debt Microsoft is eying is anyone's guess.