Dell must part with VMware

Dell has to part with VMware due to extremely high debts. The formerly bought company, which focuses on programming virtualization software, is now back on its own two feet.

VMware now independent again

Dell had to part with VMware from a subsidiary. The US-American computer group justifies its decision with the high company debts. Dell held the majority of the shares of the software company with 81 percent. The company is now listed on the stock exchange again. In view of the estimated stock market value of almost 64 billion US dollars, this separation was certainly not easy for Dell. But VMware is also buying its independence at a price of just under 12 billion US dollars, which is not to be sneezed at. This is the special dividend that the company owes the world-famous PC manufacturer as its former main shareholder. With the help of this payment Dell would like to reduce its almost crushing debts a little.

Dell is stuck in the debt trap

Here it becomes clear how bad things are for Dell. The company now seems to be grasping at the last straw to get out of the debt hole after all. Already in the summer of this year it became publicly known how serious the economic predicament is, in which the once so successful computer manufacturer is. Dell was already struggling with debts of 32 billion US dollars in July. Given a current stock market value of 33 billion US dollars, these debts really weigh heavily. With the sale of VMware, the company will certainly be able to push the debt down a bit.

A bad buy in 2015?

Back in April of this year, Dell announced that it was selling VMware. This ends a years-long history that began with a landmark purchase in 2015. At that time, Dell bought EMC at a cost of $67 billion. In turn, this business combination also included 80 percent of the shares in VMware. We are curious to see whether the traditional company can free itself from its high debts with the sale of VMware.