Facebook (FB) to Halve $3 bln Credit Line Due to Lowered Tax Obligations, Report

Facebook (FB) plans to slash by half a $3 billion credit line that it received from its bankers prior to its May $38 a share initial public offering, Bloomberg News reports citing a person familiar with the matter.

The world’s largest social network, which celebrated eclipsing the billion-member mark on Thursday, said in March that it secured a $3 billion 364-bridge loan to fund tax obligations. According to the report, Facebook’s $1.5 billion material cost reduction plan comes as the company’s stock decline, down 45 percent since the IPO, has lowered the tax liabilities associated with the vesting of employee stock.

Bloomberg also said that Facebook intends to change the repayment plan for the credit line, whose financing was arranged by banks including JPMorgan (JPM), Morgan Stanley (MS), and Goldman Sachs (GS), extending it from one year to three.

Facebook closed Friday’s trading session at $20.91, giving the company a valuation of $44 billion.

Compared to the opening price of $38, the social network has lost $60 billion from its market cap since the floatation in May.

The Menlo Park, California-based company is now the worst-performing IPO since records began, according to Bberg.

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