(Reuters) -Dell Technologies Inc announced Wednesday that it would spin off its 81% stake in cloud computing software maker VMware to help the PC maker reduce its debt.

FILE PHOTO: The logo for Dell Technologies Inc. will appear on a screen on the floor of the New York Stock Exchange (NYSE) in New York, United States on January 10, 2019. REUTERS / Brendan McDermid

VMware will pay a special cash dividend of between $ 11.5 billion and $ 12 billion to all shareholders, including Dell, which will receive between $ 9.3 billion and $ 9.7 billion as part of the expected tax-free transaction.

The spin-off, first proposed in a filing last July, will help Dell reduce its $ 41.62 billion in long-term debt, much of which was acquired during the 2016 acquisition of data management company EMC has been. Dell hopes this will help achieve an investment grade rating and simplify the capital structure.

VMware is Dell’s most powerful device right now and has benefited from companies that …

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